Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH RAILWAYS (LIVERPOOL STREET STATION) BILL

Order for Third Reading read.

To be read for the Third time upon Thursday.

WRITERS TO THE SIGNET DEPENDANTS' ANNUNITY FUND ORDER CONFIRMATION BILL

Considered; to be read the Third time tomorrow.

Oral Answers to Questions — DEFENCE

Arms Sales

Mr. Hooley: asked the Secretary of State for Defence how many persons are currently employed in the sales section of his Department.

The Under-Secretary of State for Defence Procurement (Mr. Geoffrey Pattie): At the end of September 1982 the strength of the defence sales organisation was 352 civilian and serving officers.

Mr. Hooley: As imports of manufactured goods to Britain now exceed exports, does the hon. Gentleman agree that it would be more sensible to redeploy those people in the organisation to the promotion of our civil exports instead of promoting the ugly and squalid sale of weapons of death?

Mr. Pattie: One of the many lessons of the Falklands conflict is the vital importance of having a strong defence industrial base—one that is able to respond quickly to the demands of the Armed Forces. The activities of that organisation assist in that process.

Mr. Robert Atkins: Does my hon. Friend agree that many people in the organisation have been working extremely hard to encourage sales of Tornado to as many countries as wish to buy it—Greece, for example? Can he give any background to how that proposed sale is going?

Mr. Pattie: The proposed sale of Tornado to Greece is being pursued actively by the manufacturers of the aeroplane, Panavia, which is a consortium from Germany, Italy and Britain, and there has recently been a highly successful demonstration of the aircraft's capability to the Hellenic air force.

Mr. McNamara: Does the hon. Gentleman agree that one of the lessons of the Falklands war is that we must be careful to whom we sell arms? Will he cancel the foolish

proposal to hawk arms on a ship around the Gulf—an area of great potential conflict—next year? The proposal can do neither that area nor the peace of the world any good.

Mr. Pattie: I agree with the hon. Gentleman in one respect—we must be extremely careful about whom we sell arms to. We have always done so, as have Labour Governments, who sold far more to some South American countries than we have. I do not agree with the second part of of the hon. Gentleman's question.

Falklands Campaign (Equipment and Weapons)

Mr. Latham: asked the Secretary of State for Defence whether he will make a statement on the outcome of his review of the combat performance of the equipment and weapons of the United Kingdom Armed Forces during the Falkland Islands campaign.

The Secretary of State for Defence (Mr. John Nott): I intend that the White Paper on the lessons of the Falklands campaign, which I have already told the House I am producing and which will include the operational, logistic and equipment lessons, will be published before the House rises for the Christmas Recess.

Mr. Latham: Is my right hon. Friend aware that he cannot publish too soon the details of the alterations to defence policy that are obviously necessary in the light of the Falklands campaign? Is he also aware of the grave anxiety of Conservative supporters throughout the country at the frequent reports in The Daily Telegraph of grave dissatisfaction amongst extremely senior naval officers?

Mr. Nott: If my hon. Friend believes what he reads in The Daily Telegraph, and that story, he will believe anything. It is normal for journalists to check on some of the facts that they report, but apparently that practice spoils these stories. The White Paper is not intended to be a fundamental defence policy White Paper. It is about the lessons of the conflict, especially logistics, operation and equipment.

Mr. Duffy: Is the right hon. Gentleman aware that the combat effectiveness of two vital systems would have been crucially enhanced if his Department had not dithered over the lightweight version of Sea Wolf and cancelled the Sea improvement programme for the type 42s?

Mr. Nott: The forward programme includes improvements to Sea Dart. The lightweight Sea Wolf is also in the programme.

Mr. Duffy: What about then—before the Falklands conflict?

Mr. Nott: I can tell the hon. Gentleman that we are spending far more on defence equipment than did the Labour Government. We must decide our priorities within the available resources, which are increasing, because of Government's policy, by 3 per cent. in real terms each year.

Mr. Banks: Is it not the case that the Rapier system performed extremely well during the Falklands campaign? Will my right hon. Friend assure the House that our allies in NATO are fully apprised of the effectiveness of the equipment that was used?

Mr. Nott: Yes. The Rapier system performed exceptionally well. We are providing to all our allies, both


to those, like the Americans, who are using Rapier, and to our other allies who are interested in the project, all the lessons that we have learnt about the equipment, which was an outstanding success.

Mr. John Silkin: Will the right hon. Gentleman be presenting the White Paper himself? Does he intend that there should be a debate before Christmas in which he will take part, or will that duty be left to his successor?

Mr. Nott: Unless the Prime Minister has a reshuffle before Christmas—I do not control that—I shall be presenting the White Paper. I hope that we can produce it in adequate time for the House to absorb it before hon. Members go away for the Christmas Recess. Whether there is a debate will be decided between the usual channels. Obviously, having published the White Paper, I should welcome a debate. Whether time can be found is a matter for discussion between the usual channels.

Mr. Silkin: This is a serious question. It would be curious if the White Paper issued by the right hon. Gentleman, who has announced that he intends to leave, for reasons that we understand, were to be debated by someone following him.

Mr. Nott: It is for that reason that I should welcome the opportunity of a debate on the White Paper, but the timing of it does not lie wholly in my hands.

Mr. Cormack: Is the House to infer from my right hon. Friend's reply to my hon. Friend the Member for Melton (Mr. Latham) that there is no truth in the stories that have been appearing regularly in The Daily Telegraph?

Mr. Nott: I am afraid that I do not know to which stories my hon. Friend is referring.

HMS "Fisgard", Torpoint

Mr. Hicks: asked the Secretary of State for Defence whether he has yet determined the future use of the land now occupied by HMS "Fisgard", Torpoint; and if he will make a statement.

The Under-Secretary of State for the Armed Forces (Mr. Jerry Wiggin): As has been announced, HMS "Fisgard" is due to close in December 1983. Provided that there is no other Ministry of Defence requirement for the land and buildings there, the property will be passed to the Property Services Agency for disposal in the usual way.

Mr. Hicks: Will my hon. Friend state whether there is any prospect of the Royal Marines or some other Service unit occupying this valuable and extensive site? If not, can he give the House the assurance that he will instruct the PSA to get on as quickly as possible with the sale of the site for some other positive use?

Mr. Wiggin: As the search has not been completed, I cannot say whether there will be any other Service use. If there is not, I can give my hon. Friend the assurance for which he asks. I can also inform him that the Royal Marines will not be going there.

Cruise Missiles

Mr. Newens: asked the Secretary of State for Defence when the first cruise missiles are due to be deployed in the United Kingdom.

The Minister of State for the Armed Forces (Mr. Peter Blaker): In the absence of concrete results in the arms reduction negotiations in Geneva on intermediate nuclear forces, cruise missiles are due to be deployed in the United Kingdom by December 1983.

Mr. Newens: As the United States, on many occasions, particularly recently, has made it clear that it is prepared to put United States interests before those of Britain where it suits it, how on earth can the deployment of American owned and controlled cruise missiles in this country be justified? Does the hon. Gentleman recognise that the majority of people in Britain today reject this proposal?

Mr. Blaker: The hon. Gentleman appears to misunderstand the reasoning behind the proposed installation of cruise and Pershing II missiles in Europe. That action is due to be taken, in the absence of an arms reduction agreement, at the request of the European countries. It is intended to demonstrate to the Soviet Union and to Western Europe that the United States is fully committed to the defence of Western Europe.

Mr. Cartwright: Has the Minister noted statements by United States officials that development problems affecting cruise and Pershing II missiles are no worse than those affecting any new weapon system? Does he find that choice of words comforting? Is he convinced that the cruise will be ready on time?

Mr. Blaker: According to the information that I have, I expect the cruise to be ready for deployment by the end of next year. The tests being conducted on the Tomahawk cruise missile, which is the relevant one, show a success rate of over 80 per cent.

Mr. Stokes: Is my hon. Friend aware that most people hope that the sooner these weapons are deployed in the United Kingdom the better, especially in view of the threat from the growing number of Soviet SS20 missiles? Will my hon. Friend do all in his power to counter the dangerous and misleading opposition to the stationing of these weapons here?

Mr. Blaker: I agree with my hon. Friend about the urgency of this problem. When NATO first proposed in 1979 the installation of cruise and Pershing missiles, and simultaneous negotiations with the Soviet Union to make that deployment unnecessary if agreement could be reached, the number of SS20s in the Soviet Union was just over 100. The figure is now 324. I believe, therefore, that the imbalance that existed in 1979 has worsened. We shall try to reach a disarmament agreement, but in the absence of such an agreement we must press on with our plans.

Mr. Strang: Is the Minister aware that the brave women of the Greenham Common peace campaign are representative of the views of millions of women in this country? Has he recognised that the harsh decision of the authorities to imprison them will increase rather than decrease the determination of women and men throughout Britain who are determined to oppose this dangerous escalation of the nuclear arms race?

Mr. Blaker: It is clear to me that the vast majority of people in this country believe in nuclear deterrence combined with a policy of multilateral negotiations for arms reduction. The case of the women at the so-called peace camp at Greenham Common is not a matter for me.

Mr. Colvin: Will my hon. Friend confirm that cruise missiles are defensive or retaliatory, and that they are in no way offensive or first-strike weapons.

Mr. Blaker: My hon. Friend is absolutely right. They travel at about the same speed as a British Airways jet. They would take three hours to reach Moscow.

Mr. Denzil Davies: Is the Minister aware that the original decision to deploy cruise missiles, far from bringing America and Western Europe closer together, has created confusion and dissension, especially by raising the spectre of limited nuclear war in Europe? Why do not the Government cancel the project, which is a major and dangerous step on the ladder of nuclear escalation?

Mr. Blaker: If there is confusion, it has been caused largely by some of the unilateralist organisations which have been spreading false information. I have previously told the House that one CND leaflet contained five gross errors of fact, three of which are conceded either by Monsignor Bruce Kent or by Lord Jenkins of Putney, a former hon. Member of this House. A limited nuclear war is not an objective of Western policy. The introduction of cruise missiles is intended to demonstrate that the United States is bound into the defence of Western Europe.

Mr. Davies: Will the hon. Gentleman concede that the whole object of a cruise missile is to fight a nuclear war on the Continent of Europe? Why is that not a limited nuclear war?

Mr. Blaker: The right hon. Gentleman is talking rubbish.

Falklands Campaign (Argentine Weapons and Equipment)

Mr. Robert Atkins: asked the Secretary of State for Defence if he will make a further statement concerning Argentine weapons and equipment discarded in the Falkland Islands; and if any uses can be found for such material within the Armed Forces of the United Kingdom.

Mr. Wiggin: We are continuing to examine and, where appropriate, recover to the United Kingdom, Argentine military equipment left on the Falkland Islands. The majority of items being retained are for operational use by our own forces or for technical evaluation.

Mr. Atkins: I am grateful for that reply. To what extent does my hon. Friend think the Territorial or reserve forces can use some of the equipment that has been left behind, thereby enabling them to have more ammunition than would otherwise be available? To what extent are the weapons or equipment being returned to this country for evaluation likely to be used by our forces?

Mr. Wiggin: We are evaluating all these factors. If the Territorial Army has requirements that can be filled by this equipment, it may well be issued with such equipment. I am afraid that I cannot quantify the matter, as research is proceeding at the present time.

Mr. James Lamond: As Conservative Members, and in particular the hon. Member for Preston, North (Mr. Atkins), continually stress, erroneously, that our enormous defence expenditure creates jobs, is it not rather illogical of the hon. Member to suggest that we should revert to using secondhand military equipment?

Mr. Wiggin: In the interests of the taxpayer, my Department will always use that which is available to it. In this case all the equipment is in excellent order and will be of use to our forces.

Mr. Hoyle: Were any Exocet missiles containing British components supplied to Argentina during the Falklands campaign? Did any of the Exocet missiles that were used during this campaign contain any British components? If so, what were those components?

Mr. Wiggin: That is a long way from the original question, The facts about the Exocet missiles are well known.

Public Weather Forecasts

Mr. Warren: asked the Secretary of State for Defence if he will arrange for the regular publication of data on the accuracy of public weather forecasts and state the latest data on their accuracy which are available.

Mr. Wiggin: No, the accuracy of public weather forecasts, which has been maintained at 86 per cent. nationally since my hon. Friend asked a similar question in July 1981, is very high, and any significant trend needs to be judged over a period of years.

Mr. Warren: While I do not doubt my hon. Friend, I find his reply extremely surprising, and my surprise is widely shared. Will my hon. Friend explain, chapter and verse and more lucidly, about the weather forecast accuracy of 86 per cent., and say what it is based on? Can weather forecasters be a little more accurate in the presentation of their information, as their forecasts are supposed to be accurate?

Mr. Wiggin: One of my predecessors wrote to my hon. Friend as long ago as 1977 explaining the procedures for evaluating weather forecasts. I am afraid, Mr. Speaker, that you would not allow me to do so in detail, but I am satisfied that as much care is given to this as is possible within the resources available.

Chatham and Portsmouth Dockyards

Mr. Dubs: asked the Secretary of State for Defence when the closure of Royal naval dockyard facilities at Chatham and Portsmouth is now expected to occur; and if he will make a statement.

Mr. Blaker: I have nothing to add to the remarks of my right hon. Friend the Secretary of State for Defence during the defence debate on 1 July.

Mr. Dubs: Given that the White Paper on the lessons of the Falklands war has been promised us before Christmas, would it not make sense to delay making any further progress on the closures of these two dockyards until we have had a chance to debate the lessons of the war? This is particularly so as one outcome of such a debate might be that we would wish to put more resources into submarines, which would make the facilities at Chatham even more valuable.

Mr. Blaker: We have already said that there will he no further redundancy announcements in Portsmouth before the beginning of next year, and some redundancy notices that had been declared have been withdrawn. With regret we have to repeat the decision, already announced, that Chatham will close as planned.

Sir Frederick Burden: When did the first SSN submarine go to Devonport for refit and refuelling, what was the target date when it was to come out, what is the position with regard to that submarine now, and when is it now expected to come out?

Mr. Blaker: The first submarine was "Swiftsure". It is now expected to come out in March next year. It has been delayed. The principal delay was at the beginning of the process when work was not started on the submarine for 15 months because of an industrial dispute. Since then there has been another industrial dispute, which affected all the dockyards last year, as my hon. Friend will know.

Mr. John Silkin: Is not one of the lessons that can be drawn by the House in advance of the White Paper—and one that is corroborated by many people who took part in the Falklands war—that had the rundowns and closures in Chatham, Portsmouth and Gibraltar proceeded a little earlier there would not have been the slightest possibility of our being able to send a fleet to the Falklands?

Mr. Blaker: That is untrue. As the right hon. Gentleman knows, we are expanding Devonport and Rosyth. We still have to take a decision about the exact size at Portsmouth, and in addition there are the commercial yards.

Mr. John Wells: Will my hon. Friend assure the House that if he is quite determined on his policy on Chatham there will be sufficient opportunities for there to be a transition from military to civil use, so that the professional and technical skills that are so famous in Chatham will not be dissipated, and the work force can move over to civilian work with an easy transition?

Mr. Blaker: I agree with my hon. Friend about the skills available at Chatham. Some of the personnel from Chatham have already moved to Devonport and others will move in future. As my hon. Friend will know, North-West Kent has been declared an enterprise zone, and Chatham is one of the only three places in the country that benefit from the enterprise allowance scheme. I hope that these measures will help.

Mr. Rhodes James: How can my hon. Friend tell the House that the Government have already come to a decision before the White Paper has been published? Does he realise that many Conservative Members share the concern expressed by the hon. Member for Battersea, South (Mr. Dubs)?

Mr. Blaker: We shall be taking a decision about the level of manning at Portsmouth in the light of the White Paper, and that allows us a certain amount of flexibility. With regard to the broad picture, we have said that we propose to continue with the strategy set out in last year's White Paper, but within that strategy we shall be prepared to draw lessons from the experience of the Falklands. On that basis, it is clear that we have to say, with great regret, that Chatham will not be necessary for our purposes.

Warship Construction

Mr. Hardy: asked the Secretary of State for Defence whether any significant changes will be made in the design and the materials used in the construction of warships as a result of experience in the South Atlantic.

Mr. Pattie: Analysis of the experience gained during the Falklands campaign is not yet wholly complete, but we are considering some detailed changes in warship design.

Mr. Hardy: Will changes be made in the use of materials in warships now under construction or planned? In particular, is the Minister aware that naval design seems to have ignored aspects of technology that have long been obvious in other sectors of metal use? For example, in the technology of deep mining, the disadvantages of aluminium have long been seen. May we have an assurance that the experience in other sectors of technology will be urgently applied to naval construction?

Mr. Pattie: I assure the hon. Gentleman that all these factors are being taken into account.

Mr. Nelson: Does my hon. Friend agree that it is already apparent that the problem of fire in warships in the South Atlantic is not just a question of the aluminium superstructure but the flammable material inside the warship? Will future warships be rather more spartan and less comfortable internally, and are these factors being taken into account in the design and specification of ships already under construction?

Mr. Pattie: I assure my hon. Friend that these are precisely the factors that we are examining.

Mr. Concannon: Will the Minister confirm that the ships sunk off the Falklands are now war graves? Is he aware that some of the next-of-kin will find it difficult to believe that diving is being carried out on those ships when they were led to believe that that would not be possible, which was the reason for not bringing the bodies home?

Mr. Pattie: The right hon. Gentleman has been written to in detail on the matter. Perhaps he will await the arrival of that letter.

Sir Patrick Wall: Is not one of the lessons that of the inadequacy of our ships' surface-to-airdefences, and are plans being made to fit lightweight Sea Wolf to all our warships to combat missiles?

Mr. Pattie: As my hon. Friend will be aware, these questions arising from the Falkland conflict will be addressed in the forthcoming White Paper.

Gurkha Pension

Mr. Neil Thorne: asked the Secretary of State for Defence when the Gurkha pension of £5·88p a month was first paid; and what it should be now to offset the effects of inflation.

Mr. Wiggin: The pension in question was payable with effect from 1 September 1980. It has already been raised in line with movements in the consumer price index for Nepal to £8·94p with effect from 1 April 1981 and to £10.00p with effect from 1 April 1982.

Mr. Thorne: Knowing of my hon. Friend's great admiration of the Gurkhas, and as they did so much to assist us in the South Atlantic, standing shoulder to shoulder with our own Service men, does he agree that it would be wrong now to shelter behind the agreements made 30 years ago with the Indian Government to maintain the pensions in line with those of the Indian Army? Is it not now time thoroughly to review the position with a view to updating the amounts paid to a much more sensible and realistic figure?

Mr. Wiggin: As my hon. Friend knows, a substantial change was made in 1981 to inflation proof this pension in terms of the economy into which these people retire. While I completely share his compliments on their performance—indeed, everyone has known of that performance for many years—the fact remains that they are not complaining about the new arrangements, which they welcomed at the time.

Mr. Ron Brown: Is it not a disgrace that former soldiers from both world wars, not just Gurkhas, should have to depend on handouts from the Earl Haig fund? Will the Minister do something about it?

Mr. Wiggin: I am not aware of any difficulties for Gurkha soldiers.

Mr. Greenway: Does my hon. Friend agree that as the Gurkhas are performing identical duties to our own indiginous troops, in all fairness they ought to be moved more closely to our own scales?

Mr. Wiggin: This question relates to terms of engagement. When the Gurkha soldier signs on, he is well aware of what his pension is likely to be, and, after all, we have made a substantial improvement on the previous payment.

RFA "Fort Austin"

Mr. Leighton: asked the Secretary of State for Defence what were the circumstances in which the Royal Fleet Auxiliary "Fort Austin" sailed for the South Atlantic in March.

Mr. Nott: RFA "Fort Austin" sailed from Gibraltar on 29 March to replenish HMS "Endurance".

Mr. Leighton: Is the right hon. Gentleman confirming that the "Fort Austin" sailed before the Prime Minister said on 31 March that she was aware of the possibility of an Argentine invasion? Does it not stretch credulity too far to imagine that a ship of that size was meant to provision HMS "Endurance"? Will the right hon. Gentleman make a clean breast of this issue and say whether the vessel was sent to retrieve and collect the nuclear weapons that were contained on the ships of the task force?

Mr. Nott: RFA "Fort Austin" sailed to replenish HMS "Endurance". She sailed on 29 March. Those are the facts.

Mr. Dalyell: Did Ministers give the order for her to sail?

Mr. Nott: Of course. Who else?

Mr. Prescott: Is the Secretary of State aware that the merchant seamen now on board this vessel in the Falkland Islands are in industrial dispute because the Department refuses to pay them the danger and hardship allowance paid to other merchant seamen sailing on civilian vessels? In the interests of justice, will he intervene, correct the injustices and return the ship to full operation?

Mr. Nott: I shall look into the points that the hon. Gentleman has made. However, in general the performance of our merchant seamen in the Falklands conflict was absolutely outstanding. The negotiations that we undertook at the outset of that conflict provided a substantial and well-deserved augmentation to the Merchant Navy's pay and allowances. I do not think that the hon. Gentleman or anyone else can say that they were not extremely well paid for doing a marvellous job.

Dr. McDonald: Will the right hon. Gentleman confirm that the sending of the "Fort Austin" had nothing whatever to do with the invasion of the Falklands by Argentina? Is he saying that the Ministry of Defence knew nothing whatever of the invasion before the Prime Minister heard of it two or three days later? Will he also confirm that the sole purpose of the visit of "Fort Austin" was to provision HMS "Endurance"?

Mr. Nott: I do not want to spoil the Opposition's excitement about this matter, but RFA "Fort Austin" sailed to replenish HMS "Endurance". That is why she was sent, that was the purpose of sending her, and much as I am sorry to disappoint the Opposition, that is the truth.

Mr. Dalyell: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply involving a lie—[Interruption.]

Mr. Speaker: Order. Did the hon. Gentleman say that it was a lie? If so, he knows that he must withdraw the remark.

Mr. Dalyell: On a point of order, Mr. Speaker. One does not send a 16,500-tonne—

Mr. Speaker: Order. The hon. Gentleman is a parliamentarian and knows that he cannot accuse anyone of telling a lie. The sooner he withdraws that remark, the sooner we can return to questions.

Mr. Dalyell: I do withdraw it, Mr. Speaker.

Falkland Islands (Visit)

Mr. Aitken: asked the Secretary of State for Defence if he will make a statement on his visit to the Falkland Islands.

Mr. Nott: I visited the Falkland Islands from 22 to 25 October. The major achievement of our forces since the ending of hostilities has been the construction at Stanley of a runway capable of operating air defence aircraft. The top priority now is to provide adequate accommodation for all military personnel prior to the next Falklands winter.
The excellent relations between Service men and islanders are mirrored by close co-operation between the military and civil authorities in their many areas of mutual concern. Much remains to be done and some significant problems, such as the presence of indiscriminately laid mines, remain. But the progress made since June provides every confidence for the future, and I am sure that the House would wish to join me in congratulating all concerned on what has been achieved so far.

Mr. Aitken: I thank my right hon. Friend for that reply and agree wholeheartedly with his last remarks. In view of the recent reports that Argentina has been trying to purchase Exocets and other formidable military equipment, can he assure the House that our own forces are in a satisfactorily strong position to defend the islands against any future attack or invasion?

Mr. Nott: Yes.

Mr. Crawshaw: Does the right hon. Gentleman agree that the construction of the runway at Port Stanley by the Armed Forces is a remarkable achievement by any standards? Is he satisfied that the situation at that airfield is sufficient to carry out the military purposes of the task force? Has he any other place in mind for a second airfield?

Mr. Nott: I agree with the hon. Gentleman that the achievement of the Royal Engineers in constructing the longer airstrip at Stanley is remarkable, and the speed with which they did it was amazing. We are looking at a more substantial airfield for the future. No decisions have been taken. A team has studied another site, but, as the hon. Gentleman may know, we have now asked the team to have another look at the present airfield site with a view to strengthening and lengthening it.

Mr. Foulkes: Will the Secretary of State confirm the recurrent annual cost of maintaining the garrison on the Falkland Islands? Will he also confirm that as public expenditure as a whole is not to rise, and as defence expenditure will, the cost of maintaining the garrison on the Falkland Islands will result in substantial cuts in other expenditure? Is it right, for example, that old-age pensioners should be asked to pay for this through the clawback in the pensions increase that the Government are proposing?

Mr. Nott: The hon. Gentleman knows that there is no clawback. The provision being made next year for the capital and revenue costs of the garrison is £424 million. That provision will be published in the public expenditure White Paper. That money will be used for the augmentation of our general defence capability and any increases in our forces to meet the garrison needs.

Mr. Buck: Is my right hon. Friend aware that hon. Members on both sides of the House are grateful for the fact that he saw us immediately on his arrival from the Falklands, before some of us embarked for the Falklands? Will he confirm that the morale of our forces on the Falkland Islands is at its highest and that they will all be in fixed roof accomodation before the onset of the next South Atlantic winter?

Mr. Nott: I am grateful to my hon. and learned Friend for leading a group of Members from both sides of the House to the Falkland Islands, and for what he has advised me on his return. The morale of our Service men was extremely high. They are still living under difficult conditions, and we have to get them into better accommodation before the next Falklands winter. They are doing a splendid job and morale is excellent.

Mr. McNamara: All those Opposition Members who went agree with the right hon. Gentleman's statement about the conduct and morale of our troops, who are working under appalling conditions. We are anxious that there should be no doubt about their being in proper accommodation when the next Falklands winter comes. Secondly, there seems to be a grave lack of airborne early warning systems in the area. Does the right hon. Gentleman agree that it seems to be a waste of ships to have them still out on picket duty?

Mr. Nott: On the latter point, we have good radar coverage of the islands. Until we update and modernise the radar systems, it is useful to use ships as radar pickets, to augment the existing system. The air defence of Port Stanley and the islands is now satisfactory. We have Phantom aircraft, augmented by Harriers. I agree with the hon. Gentleman that we must have proper accommodation by next winter.

Sir Hector Monro: Does my right hon. Friend agree that the Royal Air Force squadrons flying the air bridge, the tanker crews and the fighter squadrons being refuelled

on the way to the Falklands are showing exceptional airmanship? Will he give the Royal Air Force the congratulations of the House on that achievement?

Mr. Nott: I shall certainly pass on those remarks. The quality of the work and the spirit in which our forces are tackling the problem are remarkable. If it is representative of young people generally today, the country has a great future.

Trident

Mr. Canavan: asked the Secretary of State for Defence whether he has received any representations from Scotland in support of Government policy to locate the Trident nuclear missile base in Scotland.

Mr. Blaker: Our records do not distinguish between correspondence according to the residence of the author.

Mr. Canavan: Does the Tory Government not realise that if they persist in trying to foist Trident on to the people of Scotland they may come up against direct action even more widespread than the recent events at Greenham Common? In view of the threat to peace that nuclear weapons pose, should it not be the Prime Minister who is gaoled for breach of the peace instead of the 16 courageous women who are the victims of a grave miscarriage of justice?

Mr. Blaker: I am confident that when the people of Scotland fully understand the merits of Trident and the fact that it is the most efficient successor to Polaris at the most reasonable cost, they will support it. I am encouraged in my assessment of the views of the people of Scotland by a recent opinion poll, published in the Glasgow Herald on 18 October, which showed that a clear majority of Scottish people thought that Great Britain should retain nuclear weapons. In no category of age, sex or class was there a majority opposed.

Mr. Marlow: Will there not be greater public reluctance about the siting of cruise than the siting of Trident as the British Government, in which the nation has a deeply enduring trust, have physical control over Trident, whereas the American Government have physical control over cruise?

Mr. Blaker: My hon. Friend knows the arrangements for cruise. They will be the same as those that have applied to American nuclear forces in this country for many years under successive Governments—the bases cannot be used without the consent of both Governments.

Mr. Denzil Davies: Since more than half the expenditure and most of the maintenance and servicing on Trident will be done in the United States, and since no one in his right senses believes that Great Britain will be engaged in a nuclear exchange with Soviet Russia against the will of the United States, why do the Government not cancel this ridiculous project, which distorts our defence strategy and places an intolerable burden on public expenditure?

Mr. Blaker: There is no doubt that Trident in British hands will be an independent strategic nuclear deterrent, as is Polaris at present. It is still our assessment that 55 per cent. of the work on Trident will come to this country.

Warsaw Pact (Nuclear Weapons)

Dr. Mawhinney: asked the Secretary of State for Defence what is his latest assessment of deployment of medium-range nuclear weapons by the Warsaw Pact.

Mr. Blaker: The Soviet Union has now deployed a total of 324 modern SS20 missiles, each with three warheads. Approximately two-thirds of those weapons face Western Europe. In addition, there are still up to 275 SS4s or SS5s deployed in the Western Soviet Union, and approximately 500 aircraft.

Dr. Mawhinney: Will my hon. Friend assure the House that the threat posed by those weapons will be resisted by appropriate deterrents and that there will be a determined effort by the Government to see the number of such weapons reduced?

Mr. Blaker: I entirely agree with my hon. Friend. As I explained earlier, we put forward proposals for disarmament negotiations in 1979. The Russians were slow to take up that offer. I am glad to say that they are now negotiating with the United States, but meanwhile we have to continue with our preparations for the deployment of those missiles. I believe that any other course would be fatal to any prospect of success in those negotiations.

Oral Answers to Questions — PRIME MINISTER

Engagements

Ql. Mr. Duffy: asked the Prime Minister if she will list her official engagements for Tuesday 16 November.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. I also met the chairman of the Indian Advisory Committee of the Festival of India to mark the end of the very successful festival. Early this afternoon I was present when Her Majesty the Queen welcomed Queen Beatrix of the Netherlands on her arrival in London. In addition to my duties in the House I shall be having further meetings later today. This evening I will be attending a State banquet in honour of Queen Beatrix of the Netherlands at Buckingham Palace.

Mr. Duffy: What encouragement does the Prime Minister draw from the latest findings of the Central Statistical Office showing industrial production in September as flat, and with no improvement in the third quarter over the second, thus confirming the recent bleak forecasts of the CBI? Does the Prime Minister deny that the PSBR could now provide for some pump-priming, or has she abandoned unemployed people to the electoral needs of a give-away Budget?

The Prime Minister: The hon. Gentleman is right, production is flat. But he will have noticed that the retail trade is buoyant and he will have drawn the conclusion that people are buying more goods. The demand is there, but it is not being met by production from our factories. That stresses the need once again to be competitive both in price and design. As regards the PSBR, as one of the world troubles in the coming financial year will be the accumulated deficits of debtor countries, it is far better that we do not join those countries, but keep our finances on a sound basis.

Mr. Montgomery: Will my right hon. Friend find time today to study recent developments in the London borough

of Lambeth, where, due to the defection of a Social Democrat councillor, the Marxist-led Labour Party is now in control? Does she not think that that is bad news for the ratepayers of Lambeth? Does that not prove, as regards the Social Democrats, that once a Socialist always a Socialist?

The Prime Minister: I agree wholly with my hon. Friend. What has happened in Lambeth shows that the Social Democrats prefer to keep their Socialist allegiance when there is a choice. I agree also that it is bad news for the Lambeth ratepayers. Under the Conservative-controlled Lambeth council the rates were reduced by a further 10p this year.

Mr. Foot: Turning to a more serious subject than the SDP, may I ask the right hon. Lady whether she will be good enough to clear up the confusion that she left last week about the proposed pension clawback? There is a serious discrepancy among Ministers about the amount involved: the right hon. Lady says about £375 million and the Chancellor about £180 million. May not the Chancellor be correct, as the sum is only for part of a year? Will the right hon. Lady tell us that she will not proceed with the miserable measure to take back money which pensioners would otherwise have had under the law of the land?

The Prime Minister: The right hon. Gentleman has confused two figures. The £375 million is the extra amount paid in advance, by virtue of the 11 per cent. payment being over and above the amount that would have been required for inflation. That is the extra amount paid out in advance this year. It is a payment in advance. The £180 million next year is an amount which is in the public expenditure plans and which has not yet been allocated.

Mr. Foot: Will the right hon. Lady take the opportunity to state that she will not go ahead with the legislation? In the five years of the Labour Government the value of the pension was increased by over 20 per cent.—[Interruption.]—The real value was increased by over 20 per cent. Seeing that the pensioners might conceivably get a 2 per cent. increase, the right hon. Lady proposes to claw back part of it. Will she promise—we give her the chance—not to introduce legislation on the subject?

The Prime Minister: No. What we also have to consider is—[Horn. MEMBERS: "Answer"] I answered directly. I said "No". If only hon. Members would listen instead of shouting. I also have to consider—[Interruption.] If hon. Members do not wish to listen, I shall not reply.

Mr. Foot: rose—

Several Hon. Members: rose—

Mr. Speaker: Order. It is inevitable that if people are not allowed to speak, both sides of the House will get agitated. I remind the House once more that everyone is entitled to a reasonable hearing.

Mr. Foot: It is right that the right hon. Lady should be heard. Everyone in the House and the country should hear her answer. The pensioners especially want to hear it.

Mr. Robert Atkins: That includes the right hon. Gentleman.

The Prime Minister: I believe that the pensioners would be the first to understand the burden on the working population. On a pay-as-you-go scheme, every penny paid


out this year must be paid in this year, and it is paid in by the working population, who will already be paying a 9 per cent. national insurance contribution on their wages, with the employer paying 10·45 per cent. What they are paying is not sufficient to meet the fund's outgoings this year, which is being borne from the reserves. We cannot go on that way. When we come to consider the amount for the pension next year, which will be decided in the Budget, we must take account of the pensioner and the working population, The right hon. Gentleman will remember that the phraseology that I use is similar to that used during the time of the last Government.

Sir William Clark: Is my right hon. Friend aware that with the recent 2 per cent. cut in mortgage interest, rates have come down by 5 per cent this year? Does she agree that in many cases it is cheaper for a council tenant to buy rather than to rent, which should be an added incentive for people to buy council houses?

The Prime Minister: Yes. In many cases the discount permitted to council tenants and the tax relief on mortgage payments will mean that the net mortgage repayment is less than the rent that would otherwise have been paid. I hope that that fact will lead many council tenants to take the opportunity to purchase their houses under the right-to-buy legislation.

Mr. Dormand: asked the Prime Minister if she will state her official engagements for 16 November.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Dormand: In view of the Government's gross interference in the price mechanism for gas and electricity, will the Prime Minister, who clearly acknowledges that there is merit in intervention, abandon other of her cherished principles and throw out the monetarist concept in order to get the country working again?

The Prime Minister: The hon. Gentleman must be referring to a levy on gas. There is petroleum revenue tax on gas from some fields but not on gas from others. The recent decision was made wholly by the Gas Council, and the decision was made possible as it had kept within its external financing limit. I would have hoped that the hon. Gentleman would welcome the decision.

Mr. Hordern: Is my right hon. Friend aware that the Labour-controlled council in Crawley has put up signs costing £900 stating that Crawley is a nuclear-free zone? Does she agree that neither Mr. Andropov nor the ratepayers of Crawley are likely to be impressed by the declaration and that it is a total waste of money?

The Prime Minister: I entirely agree. The sign has no legal significance and serves no purpose. Unfortunately, it puts an extra burden on the ratepayers and shows once again that Labour has no consideration for them.

Mr. Charles R. Morris: Will the Prime Minister recall the words that she intoned in Downing Street after the last election to the effect that she would seek to give hope where there was despair? Is she aware that in my constituency 125 people are now unemployed for each vacancy on the job register? Against that background, why does she refuse to meet a deputation from the Manchester city council and the North-West Industrial Development Association to discuss the industrial wasteland developing in the area?

The Prime Minister: Had the Government not tackled the fundamental problems which the previous Government thrust aside, such as overmanning and keeping old industries going with money that should have been directed to new industries, because they were too difficult, there would be precious little hope for industry's future. We now have to make industry still more competitive and we have a long way to go to make up for the lost years. The deputation from Manchester city council should be seen by the Department of the Environment.

Lord James Douglas-Hamilton: In view of the new Soviet leadership, will my right hon. Friend agree to support the Swedish Government in any new representations that they may make about the fate of Raoul Wallenberg, especially as his plight symbolises the fate of countless other political prisoners?

The Prime Minister: As my hon. Friend knows, we have considered the matter before. It is extremely serious. Raoul Wallenberg disappeared a long time ago, having helped many people to escape from a dangerous situation, in which their lives may have been lost. We shall certainly join in any representations.

Mr. Alton: asked the Prime Minister if she will list her official engagements for Tuesday 16 November.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Alton: Following the Prime Minister's statement last night that pensioners should not be reduced to penury, will she confirm that had the £10 Christmas bonus kept pace with inflation it should now be about £30? Does she agree with what a Liverpool pensioner said to me recently, that if she does not increase this pitiful sum it could reasonably be said that Scrooge is alive and well and living in Downing Street?

The Prime Minister: My comments last night referred to the savings of non-index-linked pensioners having been reduced by a policy of inflation over the years. I said that those days were over; the pensioners were abused disgracefully by a policy of inflation over a decade.
It is easy for the hon. Gentleman to ask for increases in the bonus, but they must be met out of the pockets of the working population. Every time that we put extra burdens on them or on industry we make it more difficult for industry to be competitive. The hon. Gentleman knows of the increases in the national insurance contribution that we have had to make this year. It would not be wise to put an extra burden on the working population.

Mr. Dykes: As my right hon. Friend has expressly not taken time for the purpose today or yesterday, does she believe that it was wise of President Reagan to sign the book of condolence in Washington for President Brezhnev?

The Prime Minister: It is for President Reagan to make his own decisions. I sent a message of condolence direct to the Soviet Union, the Minister of State signed the book of condolence and the Foreign Secretary went to the funeral in Moscow.

Mr. Dalyell: Did the Secretary of State for Defence tell the Prime Minister on 29 March that Ministers had ordered the Fleet Auxiliary vessel "Fort Austin" to the South Atlantic?

The Prime Minister: The hon. Gentleman will recall that HMS "Endurance" had to be replenished. The Fleet Auxiliary vessel was sent to do that. I should have thought that the hon. Gentleman would be pleased that "Endurance" was to be replenished.

Mr. Colvin: asked the Prime Minister if she will list her official engagements for Tuesday 16 November.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Colvin: Will my right hon. Friend ensure that at the forthcoming GATT conference the Government will

uphold the principles of genuine free trading, bearing in mind the activities of countries, such as Spain with cars and Korea with ships, which do not follow the British example?

The Prime Minister: It is our purpose, and it is in our interests, to uphold the principles of free trade. However, we are in difficulty when other countries do not uphold the same principles. We must make it clear to them that if free trade is to continue, as we wish, they must bring down their barriers or they will be in danger of retaliation from Britain.

Personal Statement

Mr. Edward Rowlands: Yesterday, in exchanges on Britoil, I used the phrase "false prospectus". That term has a special connotation under the Companies Acts and to issue such a prospectus would be an offence. I had no wish to imply such conduct and I withdraw the phrase.

Secretary of State for the Environment (Statement)

Mr. John Maxton: On a point of order, Mr. Speaker. Yesterday afternoon the Secretary of State for the Environment made an important statement in the House on, among other matters, improved grants for housing and enterprise zones. The announcement for Scotland was made in a press statement and in a written answer. Is it not a great discourtesy to Scottish Back-Bench Members that the Secretary of State or one of his Ministers did not make a similar statement for Scotland?

Mr. Speaker: That is not my responsibility, and I cannot rule on it.

WELSH AFFAIRS

Ordered,
That the matter of the National Health Service in Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for their consideration.—[Mr. Cope.]

NORTHERN IRELAND COMMITTEE

That the matter of the proposal for a draft Dogs (Northern Ireland) Order 1982, being a matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Committee.—[Mr. Cope.]

STATUTORY INSTRUMENTS, &c.

Mr. Speaker: By leave of the House, I shall put together the Questions on the motions relating to Statutory Instruments.

Ordered,
That the Immature Spirits (Rum) Order 1982 (S.I., 1982, No. 1575) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Restriction on Agreements (Manufacturers and Importers of Motor Cars) Order 1982 (S.I., 1982, No. 1146) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Employment Subsidies Act 1978 (Renewal) (Great Britain) Order 1982 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Cope.]

Orders of the Day — Water Bill

Order for Second Reading read.

The Minister for Local Government and Environmental Services (Mr. Tom King): I beg to move, That the Bill be now read a Second time.
I recognise that the Bill is not the most newsworthy of the measures that will come before the House this Session, but it is none the less an important and neecessary measure. It follows the Water Act 1973, which is well known to you, Mr. Speaker. When my right hon. and learned Friend the Member for Hexham (Mr. Rippon) introduced the Bill in 1972, he referred to it as "commendably short" with its 40 clauses and nine schedules. I hope that the House will agree that its successor 10 years later, with 10 clauses and five schedules, is minute in comparison. The only comment that others might make is that the 40 clauses and nine schedules cost 73p, whereas our 10 clauses and five schedules cost £2·95. I make that point before another hon. Member makes it for me; it teaches the lesson of what has happened during the past 10 years and underlines forcefully the importance of other Government policies.
Hon. Members who prepare for such a debate must consult earlier discussions on the matter. I know that hon. Members will have been interested to read the exchanges during the passage of the 1973 Act when you, Mr. Speaker, played a notable part as Shadow Secretary of State for Wales. There must have been a sense on the Conservative Party of your impending elevation. Lord Cledwyn, who was trying to adduce support for the Bill, intervened during the speech of my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths), just after you had spoken, to ask:
What about the Archdruid of Wales?
My hon. Friend replied:
I think that the Archdruid of Wales spoke just now."—[Official Report, 5 February 1973; Vol. 850, c. 152.]
That was a recognition of the high rank to which you would subsequently rise, Mr. Speaker.
It is common for Governments to present a Bill to the House as though it is the most remarkable piece of legislation that could have been brought forward and it is often the role of Opposition spokesmen to imply that it is the greatest disaster to hit the nation in peacetime. I am fairly confident that the right hon. Member for Birmingham, Small Heath (Mr. Howell) will not disappoint us on this occasion.
Although this is not the most remarkable legislation, the Government attach considerable importance to it. Its overriding aim is to restructure our water management. I should make it clear that it refers only to England and Wales. The Bill proposes a new constitution for water authorities and the dissolution of the National Water Council and the Water Space Amenity Commission. The Bill contains further items relating to water and, with the possible exception of the repeal of the Water Charges Equalisation Act 1977, I hope that the other matters are non-controversial. Before the right hon. Member for Small Health laughs in amazement, I should say that they include


the borrowing limit, overseas powers and sewerage agencies. I hope that the right hon. Gentleman does not believe those to be controversial matters.
It may assist the House if I rehearse the background to the Bill and the history of the organisation of water services in England and Wales. The background against which my right hon. and learned Friend the Member for Hexham introduced the 1972 Bill, assisted ably by my hon. Friend the Member for Bury St. Edmunds, the then Under-Secretary of State, was one of 198 statutory water undertakers, 29 river authorities and 1,300 sewage disposal and sewerage authorities. The Water Act 1973 introduced instead nine water authorities in England and one in Wales which, together with the 29 statutory water companies and the local authorities responsible for sewage agencies, combined to provide the continuing water services.
However, the water authorities were given responsibility for the overall water cycle based on river basins. That moved the structure away from the predominant local government involvement that had existed previously in the 1,300 sewerage and sewage disposal authorities. A conscious compromise was reached when setting up the water authorities. There were some discussions about the membership of the authorities, but the outcome was that, although there had been a move away from the essential local government content of the previous arrangement, local authority members were given a majority on each water authority.
Anybody who considers the past 10 years will recognise that the water authorities have been through a difficult time. They came into being at the time of a high and rising level of inflation and a fairly sharp increase in water demand. In addition, the introduction of direct billing had a marked effect on the public consciousness about water costs. Taken together, that resulted in considerable criticism and opprobrium being heaped on the water authorities which were associated with other trends which were not their direct responsibility.
One must be honest and say that mistakes were made. There were problems in the structure of the new authorities. They had difficulty establishing a new corporate identity. Direct billing increased their difficulties and there was a tendency in some areas to establish substantial organisations beyond the level that could be justified.
At the same time one must recognise that considerable progress was made. If one considers the capital investment levels immediately before the creation of the water authorities and the National Water Council, it will be recognised that there has been a considerable improvement in resource planning, the introduction of common standards, tighter control of pollution, improvement in training and a welcome development in the export effort and potential of the water companies and authorities, to which I shall refer.
It is significant that, despite the criticisms made in the Monopolies and Mergers Commission reports on the Severn-Trent water authority and, more recently, on the Anglian and North-West water authorities, the MMC did not feel that there was any case for changing the basic structure that has been established.
There is anxiety that the system is not working. I have expressed that anxiety on other occasions in the House and it has been expressed more widely by many right hon. and hon. Members. The problem at the water authority level is

the confusion that exists to some extent between management, consumer representation and local authority representatives on the individual water authorities. Are the 62 members of the Thames water authority supposed to run that authority or to provide representation for the community and involvement with consumer representation? That question has never been adequately resolved.
A water authority is a substantial undertaking by any standards. One must recall the efforts that have been made by many well-intentioned and conscientious people to seek to discharge their responsibilities. I have been asked to check how many people have served in a position of responsibility on the board of the Thames water authority since it was set up 10 years ago. Board membership numbers 131. That number underlines the problems that exist.
It may be said that they are the problems of democracy. One might have more sympathy with that if the people felt that they had representatives on the water authority, that they knew who they were and that there was a real sense of accountability on behalf of the members of the water authority to the general public. The right hon. Member for Small Heath will not wish to concede it, but, sadly, there is evidence that the genuine attempt to balance those two considerations has, in certain senses, faced up to the worst of both worlds. Few people knew who represented them.
It was decided that there was a need for change, so a consultation paper was issued and representations on it were invited. The Bill contains the outcome of our deliberations—the proposal to have a small executive authority for each region, combined with consultative committees.
It is proposed that there will be a part-time chairman on each executive authority and full-time executive members. There has been criticism that, although the chief officers have an important role, they are not members of the authority under the previous structure and that it is more difficult for them to be as accountable as the authority members. They often seemed to have less say in decision making.
It is proposed that there should be executive members on the executive authority and that it should include local authority members. I emphasise that they will be chosen for their ability to contribute to the management of the substantial undertakings. They will also include appointments by my right hon. Friend the Minister of Agriculture, Fisheries and Food to cover the important requirements of both land drainage and fisheries.
We seek to cover the other side of the problem—proper representation for consumers—by means of consultative committees. Such representation has been lacking under the present arrangements. Before Committee stage, we intend to publish our draft guidelines for the form of the consultative committee. My hon. Friend the Under-Secretary of State will, if he catches your eye, Mr. Speaker, seek to say more about that. Members of the Committee will wish to look carefully at those guidelines.

Mr. Dan Jones: I must leave shortly, but I do not wish to imply disrespect to the Minister. May I ask a brief but important question? Will the inquiry be related to the supply of water, the purity of water, or both?

Mr. King: Our intention is that the remit of the consultative committees should be as wide as possible. They should cover the performance of the authority, the


quality of the water, the reliability and speed of service and repairs, charges and individual customer complaints. It will try to provide the fullest opportunity for people to raise any matter. The hon. Member for Burnley (Mr. Jones) raised the important point about water quality and I know the problems that exist in parts of Britain.
The hon. Member for Edmonton (Mr. Graham) has mentioned charges. There is some suspicion that the committees are intended to be a cover-up or somehow to prevent matters from being raised. If they are to be effective, they must be able to cover the widest possible area.
It is a difficult problem. I know that the right hon. Member for Small Heath will pour scorn on the idea of consultative committees. However, I hope that the House and those hon. Members who wish to debate the matter seriously will recognise that we are trying conscientiously to deal with a difficult problem. Management is not the same as consumer representation. They are different responsibilities. It is difficult to see how to get the balance right. We have tried to remedy what the House will recognise is not a satisfactory position, in order to strike a better balance, not only in the interests of better management of resources and better performance by authorities, but in the interests of better accountability.

Mr. Donald Anderson: As the Minister knows, Wales has gone through this exercise and guidelines have been established. Are those guidelines likely to be altered, or will the guidelines proposed by the Department exactly follow those in force in Wales?

Mr. King: All will be revealed shortly—indeed, this week, when publication takes place. However, the guidelines will be basically on the same lines. I shall ask my hon. Friend the Under-Secretary of State to give a more detailed reply on that point.

Mr. Dennis Skinner: Why is there no mention of the fact that people will get on the consultative committee and the executive boards through that new Tory system of the postal ballot?

Mr. King: I am sure that the hon. Gentleman has read the Bill and noted the method by which appointments will be made by the Secretary of State or, in the case of agricultural appointments, by the Minister of Agriculture, Fisheries and Food.
Another major proposal in the Bill is to abolish the National Water Council and the Water Space Amenity Commission. I recognise the valuable role that the NWC has played. As I said in my statement, at the time of the creation of the new water authorities the NWC played a crucial role in getting the new structure under way under the leadership of Lord Nugent and subsequently under Sir Robert Marshall. However, the main task has now been achieved.
I imagine that the right hon. Member for Small Heath will attack me for proposing to abolish the NWC. However, if we had listened to his words on the Second Reading of the Water Bill 1973 it would not have been set up. He said:
I come now to the National Water Council which is mentioned in Clause 4. I cannot believe … that any more anaemic national body has ever been set up.

The right hon. Gentleman then went through the NWC's various responsibilities and concluded with the following punishing words:
If that adds up to a job of work for about 20-odd people of considerable eminence I must be a Dutchman and so must a great many other people."—[Official Report, 5 February 1973; Vol. 850, c. 56.]
As you know, Mr. Speaker, I am a stickler for honesty and truth and I am sorry to say that there was then a sedentary interruption—which I know that you would deplore—from my right hon. Friend the Member for Chingford (Mr. Tebbit), who is now Secretary of State for Employment. It was most unlike him and most uncharacteristic, but he replied that the reference to being a Dutchman was a "good European sentiment". Whatever sentiment it was, it was hardly one of support for the NWC's continuation. The right hon. Member for Small Heath will now tell us that the NWC was a vital link in the chain. However, he may not take that line; he may suggest something rather different. In one respect, he had a point. A continuing role for the NWC cannot, we feel be justified. Although the right hon. Gentleman may not have thought so, we felt that it has an important role to play. However, there is now some justification in saying that it should not be continued.
The right hon. Member for Small Heath made a slightly extravagant comment when I made a statement to the House on 7 July 1982. He said:
Why do they believe that it is better to replace that democracy by a system of corporate centralism, the like of which we can expect to find only behind the Iron Curtain or in other totalitarian States?"—[Official Report, 7 July 1982, Vol. 27, c. 294.]
To a casual observer it may not have been immediately apparent that that was a reference to a modest change in the water industry's structure. However, it was obviously the enemy of corporate centralism speaking. When asked what the Labour Party would do, the right hon. Member for Small Heath stated his policy and said:
We believe in the public ownership of all the water resources of the country … We should place those water resources under the authority and executive control of a strong national water board".—[0fficial Report, 5 February 1973, Vol. 850 c. 59.]
That is the opponent of corporate centralism speaking.
The embarrassing point is that, although hon. Members may occasionally take facts or statements out of context, the right hon. Gentleman will not deny that his policy is to have a centralised national water authority to which all the regional water authorities will be subservient. I think that he will recognise that that is not a distortion of his policy, although he will obviously expand on it in a moment.

Mr. Eric Ogden: The Minister is introducing a Bill, yet in almost 30 minutes he has referred to only one clause. Could we hear a little less of his opinion about the policy stated by the right hon. Member for Birmingham, Small Heath (Mr. Howell) and a little more about the Bill's other clauses?

Mr. King: I am sorry that the hon. Gentleman should intervene just as I was about to expand on the Bill. Our judgment about the NWC is that the water authorities can now stand on their own and are well established. As the right hon. Gentleman knows, the practice has not changed since he was at the Department. Ministers deal directly with the individual water authorities. The Department determines the external financing limits—it used to be the capital allocations—of the individual water authorities. We no longer need to have 450 people involved in the


NWC with an administrative cost of £3·8 million direct and £7·7 million for the combined cost of the NWC and WSAC for those functions to be discharged. As the House knows, we have made suggestions about how the remaining functions of the NWC and the WSAC could be managed.

Mr. Nigel Spearing: As the WSAC spends the enormous sum of £75,000 per year, how can its destruction be justified? Its demands on the NWC and/or the Department of the Environment are modest compared with its contribution.

Mr. King: My hon. Friend the Under-Secretary will speak on the sports aspect and the WSAC. However, our judgment on the WSAC is similar to that on the NWC. It discharged an important role in the initial stages. Under the Water Act 1973, every water authority is under a duty to have regard to recreation and sport. We are considering that aspect and there is close contact between the regional sports councils and the regional water authorities. The hon. Member for Newham, South (Mr. Spearing) may be concerned that we are in some way working against sport and recreation, but in that case he did not listen to the statement made yesterday, when the Secretary of State for the Environment spoke about enhanced funding. Some of that money will undoubtedly go into that area.
In response to the request by the hon. Member for Liverpool, West Derby (Mr. Ogden) I shall deal with the Bill's contents. Clause 1 deals with the constitution and procedure of the water authorities.

Mr. Denis Howell: It is extremely flattering to know that in 30 minutes the Minister's only stated justification for abolishing the NWC is my past speeches. What other justification is there for abolishing the NWC, which is now the most important body in the country? [Interruption.] It is extraordinarily interesting that in order to justify this nonsense, the Minister has had to scour nine years of Hansard to find old jokes that he can trot out at the Dispatch Box. He failed to tell the House that nine years ago we were talking about the proposal of the then Tory Government to nationalise our municipal water undertakings without compensation or representation. Will the Minister justify the abolition of the NWC on its merits and not by making ridiculous references?

Mr. King: That was a strange intervention. I was not telling old jokes. I was quoting from what I thought the right hon. Gentleman took to be a serious speech. If his serious speeches of 10 years ago, when the House last discussed this matter, have now become bad old jokes, the solution does not lie in my hands.
The case that I thought I had explained to the right hon. Gentleman—I am sorry if it was too abbreviated for him—for the abolition of the National Water Council was that, although it did a valuable job in the early days of the creation of the water authorities when it played a valuable role in the setting of standards and the establishment of common training practices and a number of other things to which I have referred, we now feel that that role is no longer needed. Water authorities are sufficiently established. Significant costs are involved in the operation of the NWC. We believe that economies can be made.
The right hon. Gentleman has lived with the water industry for a long time. When the Labour Government

were in office, manpower in water authorities rose by 15 per cent. The right hon. Gentleman presided blithely over that. He published a White Paper and did nothing else about it. I shall not take lectures from him on what is likely to produce efficiency or cost effectiveness when, since we came to office, we have encouraged water authorities not only to reduce their charges by nearly £100 million in one year but to reduce their manning levels by nearly 6 per cent. and by a further 4 per cent. in the next two years, which will be considerable progress towards undoing the damage done when the Labour Government were in office.

Mr. Eldon Griffiths: When the National Water Council ceases to exist, where will the oversight of the pay negotiations for the industry reside? I hope that my right hon. Friend will not say that that will be a matter between the Government and the unions. A body should be set between the two.

Mr. King: That matter is under discussion at the moment. In our consultation paper we set out the options. The employers and the unions will have to consider that matter. I do not think that there will be legislation on it.
I dealt in my preamble with the justification for clause 1. Clause 2, which I hope is not controversial, involves borrowing levels which are now £4,381 million and is important with regard to capital investment for the industry. We expect that that limit will run out at the end of the financial year of 1983. The proposal is to raise the borrowing limit from £5,000 million to £6,000 million and by order to £7,500 million.
Clause 3 deals with the dissolution of the NWC and the WSAC, about which I have been talking. Clause 4 is consequential in relation to recovery of expenses by the Secretary of State from the water authorities, if that is involved.
I attach particular importance to clause 5, which I hope the House will support. I have taken a part in trying to stimulate the potential for exports of water technology equipment and the appropriate British skills to overseas markets. That is an area where the public and the private sectors can work well together. There were doubts about whether the public sector had the necessary legal powers to participate. Clause 5 seeks to clarify that.
Clause 6 deals with arrangements for carrying out sewerage functions, particularly determinations under section 15 of the 1973 Act and the relationship between the water authorities and local authorities, which are their agents for sewerage work. The Monopolies and Mergers Commission has recently, at our request, produced a report on the sewerage functions of the Anglian water authority and the North-West water authority. A number of recommendations have been made, on which we have recently issued a consultation paper. There is one specific proposal of a modest nature, which is nonetheless important, about the Secretary of State's determination, which we believe it is sensible to incorporate in the Bill. Clause 7 concerns a matter that I have already mentioned.

Mr. D. N. Campbell-Savours: What are the Minister's views on the relationship between authorities and the agency district authorities? Does he believe that one form of operation is more efficient than the other? Will he guide the House on that?

Mr. King: The Monopolies and Mergers Commission report does not propose major changes. There are


sometimes problems when some authorities have difficulties, because of their size, in working to the standards that larger authorities operate. Sometimes there is tension between the water authorities and their agents about whether the work is being done to standard and is cost-effective. We do not expect a major upheaval in that area but there may be sense in making some minor changes.
Clause 7 deals with consumer arrangements and the consumer committees. I have explained our proposals to the House and about the publication of the draft guidelines. If he catches your eye, Mr. Deputy Speaker, my hon. Friend the Under-Secretary will say more about that.
Clause 8 deals with the repeal of the Water Charges Equalisation Act. As I have said, I recognise that that might be one of the more controversial aspects of the Bill. It is recognised and understood that the Act has not succeeded in achieving its intentions. At certain times equalisation under the mechanism of the Act has had the opposite effect. Some time ago we gave notice that we proposed to repeal it. Clause 8 contains that legislative proposal.

Mr. D. E. Thomas: As the Minister is rejecting equalisation in the Bill, when are his right hon. Friends the Secretary of State for the Environment and the Secretary of State for Wales due to adjudicate on the application for bulk transfer payment made by the Welsh water authority to the Severn-Trent and North-West water authorities? We have been waiting for the response since October last year.

Mr. King: I hope that the response will come shortly. I understand why the hon. Gentleman has raised that point, which is relevant. The matter is being considered by Ministers at present. I hope that it will be resolved soon.
The remainder of the Bill—clauses 9, 10 and 11 and the schedules—are consequential on the provisions. I do not propose to describe them in detail.

Mr. Denis Howell: As far as I can understand what the Minister has said, he has not yet uttered one word of justification for the decision to abolish the Water Space Amenity Commission and the National Water Council. So that we can have a sensible debate on the matter, will he let us know the Government's view?

Mr. King: I am sorry. After the right hon. Gentleman's previous intervention, I sought to explain our position. If I have not said enough to satisfy the right hon. Gentleman, he must explain his criticisms and I will seek to reply. My hon. Friend the Under-Secretary will listen carefully to what he says. I cannot add to what I have already said. I shall not rehearse my arguments. The NWC had an important function in setting up standards and establishing a role. I explained why we felt that it was the right policy to discontinue it.

Mr. Tom Clarke: Is the Minister proposing to pay full-time executive members? If so, what payments does he have in mind? I ask this question because public money is involved.

Mr. King: The full-time executive members are already paid. There are chief executives and various directors of finance or operations in the water authorities.

There remains the question whether any of these officers, and if so which, are to be appointed to the authority. Hitherto, none of them has been a member of it.
Our concern throughout has been to achieve the twin aims of providing a good service with a cost-effective use of resources and to back that up with effective representation for the consumer that is better than that which presently exists. We have taken a number of steps to try to improve the efficiency and accountability of the water authorities and we believe that the Bill takes that process an important step further. It is in that spirit that I commend it to the House.

Mr. Denis Howell: The Minister heralded my speech by describing the contribution that he expected me to make. I shall not disappoint him. I have no hesitation in saying that it is the view of all local authorities, trade unions, much of the water industry and all sporting and recreational bodies that this is one of the most dangerous and damaging Bills to be brought before the House for a long time. My right hon. Friends and I will analyse all these claims in some detail.
We have heard the thinnest ministerial justification for a major reorganisation of one of Britain's principal industries that most of us with long service in the House have ever heard. Yesterday an application was made under Standing Order No. 9 that was based on the damaging circumstances in the water industry as a result of the Minister's interventions. The right hon. Gentleman has not thought it right to utter one word about the collapse of the wage negotiations and the disaster that that held for the British people as a result of the Government's activities. He has offered no explanation or justification since yesterday and has treated the industry, as well as the House, with great contempt.
It was the local authorities which built up the great water undertakings on which the water industry is still based. In 1973 they were taken over without proper representation. They bitterly resented that, as we all did. A Labour Government came to office within the year and it fell to me, as the appropriate Minister, to decide whether we should try to unscramble the egg of local government reorganisation—I accept that the right hon. Gentleman and his right hon. and hon. Friends were not Department of Environment Ministers at the time of reorganisation—

The Secretary of State for the Environment (Mr. Michael Heseltine): I was.

Mr. Howell: Apparently the Secretary of State was an environment Minister at the time. I am glad that he is accepting the lion's share of the blame for the nonsense that local government reorganisation turned out to be.
The then Labour Government decided, rightly or wrongly, that although they disapproved of the reorganisation they would do the best that they could with it, work with it and develop it, as it had started on almost the day that they took office. They decided not to destroy the reorganisation that the previous Conservative Government had introduced. I think that most of those in the water industry were glad that we adopted that attitude. We were critical of the reorganisation, but we tried to implement that which Parliament had introduced.


I say in passing that one of the actions that brings the House into more contempt than almost anything else is the determination of a Government automatically to destroy what the previous Government did in any area of activity.

Mr. Ogden: I could not have said it better myself.

Mr. Howell: I am glad to hear that. With that in mind, I am astonished that the Government now say that all that their predecessors did has proved to be unhelpful.

Mr. Tony Durant: rose—

Mr. Howell: No, I shall not give way so soon in my speech.
The Minister took issue with my phrase "corporate centralism", but he is now proposing that every post in any water authority in Britain shall be appointed by the Secretary of State. He is adopting an almost totalitarian approach to our affairs. If the National Water Council is abolished and nothing is put in its place, all its powers will go to the Department. As we all know, power corrupts. It is proposed entirely to corrupt local government accountability as we know it. That is unsatisfactory for most people.
There are other fundamental objections to the Bill. It is a deceitful measure. As the Minister has suggested, the real reason for its introduction is to meet the clamour which Ministers and Tory Members have engineered over the past five to seven years to reduce water charges. For the six years between 1974 and 1980 there were numerous questions from the then Conservative Opposition that had the common theme of reducing water bills. The clamour culminated in a great debate. I could quote the speech that the Minister made at the Tory Party conference when he tried to suggest to his hon. Friends and to the country that he would make changes that would result in reductions in water bills. I could quote it but I shall spare the House by refraining from so doing.
The Bill is a piece of camouflage. It will not reduce water charges by one penny and the right hon. Gentleman knows it. The Bill is irrelevant to the political aims and ambitions of the Conservative Party.

Mr. Spearing: Did my right hon. Friend notice that the Minister carefully omitted from his rather one-sided account of the previous reorganisation that when local authorities relinquished their sewerage functions to the new regional authorities they gave up about £1,000 million of Exchequer grant for water services, which subsequently had to be found by water rate payers? This has been partly responsible for the greatly increased charges which the Minister knows about.

Mr. Howell: My hon. Friend is right. I shall be referring to some of the financial issues and they will certainly be aired in Committee. This is a dangerous Bill—

Mr. Heseltine: Here we go again.

Mr. Howell: It is central to a most important area of life and I am distressed that Ministers show so much amusement about the prospect of a national water strike. That amusement extends to the Government Back Benches. I shall prove that the Bill will bring the danger of a national water strike—the first one in our history—to the forefront of our lives.

Mr. Geoffrey Dickens: The right hon. Gentleman is inciting it.

Mr. Howell: No, I am about to prove that the Government are inciting it. I am trying to prevent such a catastrophe.
The Bill is designed to destroy the basis of collective bargaining in the water industry and to replace it with 10 separate systems. Regional water authorities are already saying that they intend to go it alone in industrial relations and that they do not want national wage negotiations. How do the Government intend to deal with that? To his credit, I think that the hon. Member for Bury St. Edmunds (Mr. Griffiths) had that problem in mind when he intervened. If I am wrong, the Minister may tell me so when he winds up, but these matters should have been clarified at the beginning of the debate. The proposal is to destroy collective bargaining in a major industry.
Another destructive feature of the Bill is the abolition of the Water Space Amenity Commission. The concept that in this respect the nation's water space should be managed as part of the national heritage will therefore be destroyed as the Bill puts nothing in the place of the Commission to ensure that that policy is continued.
The first of my four principal objections to the Bill concerns the dangers inherent in it. It will create 10 separate, independent water authorities. That in itself is dangerous nonsense.

Mr. Stephen Dorrell: That is what we have now.

Mr. Howell: We have no such thing.
The various authorities cannot decide their own wage settlements, investment programmes, training schemes or price levels. None of those matters are independently determined at present, nor will they be if the Bill becomes law. Those matters are decided nationally.
The intention is clear. If one gets rid of the National Water Council, thus getting rid of national salary and wage negotiations and any input from the council to the investment programme and other matters, and then puts nothing in its place, either these matters will be decided independently by the 10 regions, which we all know will not happen, or they will be decided by the Department. In other words, the bureaucrats at the Department will rule. That is the intention.

Mr. Durant: Does the right hon. Gentleman seek to mislead the House by suggesting that the National Water Council determines local water rates?

Mr. Howell: I said no such thing. I said that it settled wage rates. The National Water Council has an input to the level of charges, but the Government themselves accept responsibility for the level of charges that is decided. That is why the Prime Minister was able to say this week that gas and electricity charges will be pegged for 12 months. The Minister made no such claim about water charges. Perhaps he can tell us whether the same prospect is involved in this instance. Certainly I hope that my right hon. Friend the Member for Rhondda (Mr. Jones) will pursue this point, as it is important.
There is nothing in the Bill and there was nothing in the Minister's speech about future arrangements in the industry for wages, superannuation, working conditions and training. No statutory responsibility is laid down for any of those matters. In other words, the Minister hopes to create a vacuum. Indeed, he has already seriously destabilised the situation in the industry. As I have said—I


challenge him to deny this—authorities such as Thames, Anglia and probably Southern already wish to carry out their own wage negotiations.

Mr. King: What is wrong with that?

Mr. Howell: The Government do not even allow that nationally. To have 10 separate systems would be the greatest incentive ever for leapfrogging in wage negotiations. It would be nonsense. Clearly the Government do not know what they are doing. They would be allowing militant areas to run their own wage negotiations, leaving the rest behind. That would create most damaging industrial relations in the most vital consumer industry in the country. Ministers cannot see that, they have not thought about it and they do not understand the problem. It is time that they got down to considering the implications of their actions.
There has been no consultation about this. The consultation document produced by the Minister in January was about the future of the regional water undertakings, but until he announced his decision in July no one had been consulted about the proposal to abolish the National Water Council or the Water Space Amenity Commission. That is no way to treat the trade unions, the industry, the National Water Council or anyone else. If a fundamental change is proposed in the structure of a national industry, the people involved should at least have been consulted. Most important, Parliament should have been consulted, but no attempt was made in January to consult us about this decision which had undoubtedly already been taken, judging from what the Government have now said.

Mr. King: What does the right hon. Gentleman think we are doing now? How can he suggest that the decision has already been taken? The decision is now for Parliament to take.

Mr. Howell: If the right hon. Gentleman is expected to join the Cabinet at any moment, one can only assume that the intellectual level there is falling every day. Does he really believe that announcing a decision and producing a Bill to make changes as drastic and radical as these constitutes consultation? Of course it does not.
Wage negotiations—yesterday's business, as the Minister says—is of vital concern to us all. Despite the Prime Minister's claim at Question Time last week that this was not a matter for the Government, we now have clear evidence of direct intervention by Ministers on two separate occasions. In a critical area at a most delicate time—the trade unions were already concerned about the Government's failure to consult or even to observe the courtesy of discussing their proposals with the people involved—the national negotiating committee decided on an offer to put to the employees this year. The committee believed that it was reasonable and could be negotiated, but the Government vetoed the offer before it was even made.
Last week, when negotiations were about to begin with the trade unions in the water industry, the Minister was frantically active during the morning reminding people that they could offer no more than 4 per cent. The 4 per cent. offer was accordingly made, but not one of the employers' negotiators believed in that offer as a basis for

negotiations. If the Minister wishes to challenge that, I shall gladly give way. Let him try to say that he did not intervene last Thursday to stop the first offer. Let it be recorded in Hansard that the Minister has no intention of taking up that offer.

Mr. Durant: rose—

Mr. Howell: No, the hon. Gentleman is not the Minister yet. He may be next week, and we would welcome that.

Mr. Durant: rose—

Mr. Howell: I shall not give way to the hon. Gentleman until he has the accolade.
The Bill is the most disgraceful and blatant intervention in the collective bargaining system that any of us can remember. What does it mean? The Minister is amused. Because of his attitude, a ballot is being held for a national strike that will involve both the supply of water and the disposal of sewage. Raised against him will be not only the manual workers, but the staff, who feel equally strongly about his cavalier treatment.
Imagine the consequences of a national strike that affects the purity and wholesomeness of our water supplies and our ability to clean up sewage. The resultant harm and danger to health will be incalculable. Even if the Secretary of State called on the Army of the Rhine, there would not be enough people to run the water industry. I am saying that advisedly. The Minister and I have faced these dangers before. We know of the dangers of a strike in one part of the water system. The dangers of a strike in the whole system are horrific. They cannot be countenanced, and the Minister knows that. An accommodation must be reached.
The way in which the Minister dealt with the unions last week and his promotion of such a Bill make his job almost impossible. It is a serious matter. I am glad to see that the delight and happiness expressed on Ministers faces has now disappeared. They do not understand what they have unleashed by their promotion of the Bill and their interference in the wages system.
The Bill is dangerous for many other reasons, with which we can deal in greater detail in Committee—not least the question of water charges. I was asked earlier whether I was saying that there had to be an intervention in water charges. In certain circumstances, there must be indirect intervention because water used in some parts of the country arises in other parts. If there is to be complete freedom for the regions—which the Government want—the exporting water authorities can charge what they wish. No Government could allow that. Therefore, there will be no freedom. That is why my right hon. Friend the Member for Rhondda will return to the question of water equalisation. The authorities must be treated fairly and honestly. They must receive a fair deal at a reasonable price, especially in Wales. That point is not referred to in the Bill.
Other matters of importance include national strategic planning and capital investment programmes. Professor Alan Williams, a most distinguished economist, has told hon. Members of his views. In an article in the Water Bulletin he said:
The key feature of such discussions at the NWC has been that we have had an independent analytical input from the NWC's staff, which, while rehearsing the views of the water authorities and of the DoE (and Treasury, where appropriate),


has presented the issues in an industry-wide context…A good example is our recent discussions concerning the interaction of the various control mechanisms which the Minister now exerts over the water authorities. By setting 'performance aims' he controls the level of total operating costs, and by adding to this the financial target to be met on real capital assets, he effectively sets the level of charges.
We know that he does that. He will not be accountable. He will not discuss matters with any national water authority. Professor Williams concludes:
So the Minister has provided himself with a pretty comprehensive and versatile set of strings, which would not be out of place in a marionette show!
That is the role that the Government have for the Minister—a puppet master in the water industry. Professor Williams's argument must be met by the Government.

Mr. Charles Morrison: I do not follow the logic of the right hon. Gentleman's argument. He has criticised a course of action that he alleges the Secretary of State can already take here and now, but then says that it would be terrible if he continued with the same course of action under a reorganised water system.

Mr. Howell: I said nothing of the sort. I have complained about the Government's interference in the water industry. There must be national water negotiations. There cannot be 10 sets of negotiations. There must be some accountability. I do not want to go further down that road, although I could do so.
The one part of the Secretary of State's speech with which I agreed is that one reason for the current problems is the introduction of direct billing. Even during the six years that the Labour Government were attacked for their policies, but did their best to defend the water industry, Conservative Members did not explain to their electorates that direct billing included both the supply of water and the disposal of sewage. That should have been met with compensating reductions from local authorities that no longer had to provide for sewage and drainage. No doubt Conservative Members did not make that point because most local authorities were under Conservative control at that time. I felt that I had to draw attention to that deception. Nor did Conservative Members investigate the cost of bureaucracy, although the Minister tried to do so today.
The amount saved by disposing of the National Water Council will be infinitesimal. I am glad to see the Minister shaking his head in dissent. Perhaps I can carry him through an examination of the figures. The National Water Council costs £8 million a year. As the total water bill is £2,000 million, the Minister can work out on his calculator that the council costs 0·4 per cent. of the total bill or 30p a year per household. We shall save each consumer 30p a year if we abolish all the work done by the National Water Council.
However, there is no prospect of abolishing all the work of the council. The Minister tried to tell us in July how it would work. He resorted to the plaintive statement that we would save on train fares to London. That was the great justification for abolishing the National Water Council. He did not tell us in July, nor today—all part of the missing scenario—that he will replace the National Water Council with the Association of Water Authorities. Inevitably, that will become the National Water Council in a year or two under another guise. The national meetings will have to continue between the representatives of the 10 regional authorities. Finance officers, scientific people, those

charged with health standards, those charged with co-ordination of operations, those responsible for planning and strategic planning, those responsible for emergency services, those responsible for training and co-ordination and, not least, all chief officers, must be consulted. That represents nine sets of meetings. The right hon. Gentleman knows that no savings will he made.

Mr. Dickens: rose—

Mr. Howell: If the hon. Gentleman will tell us how to make a saving, we shall listen to him.

Mr. Dickens: I shall be delighted to do so. In the figures that he has given, the right hon. Member for Birmingham, Small Heath (Mr. Howell) has failed to mention the immense amount of money that is spent or wasted on maladministration. A better structure would save millions of pounds. The right hon. Gentleman has not referred to that.

Mr. Howell: The Minister started by paying a tribute to the National Water Council. It is not part of his case to say that there has been maladministration there. I know the hon. Gentleman is referring to water authorities, but I am talking about the National Water Council.
The Minister says that he can make savings. That is nonsense. If the hon. Member for Huddersfield, West (Mr. Dickens) is referring to maladministration in the regions, I must draw his attention to what the Minister said. He sent the Monopolies Commission to examine two of the largest water authorities and it found no evidence of maladministration, especially in Severn-Trent. It made some constructive suggestions—I do not object to that—but it found no evidence of maladministration. As I was saying, the National Water Council and the Water Space Amenity Commission were not mentioned once in the consultation document.
The Secretary of State has not bothered to outline his proposal to abolish the Water Space Amenity Commission. The House and the country have been deceived. Perhaps he would like to explain now why he consulted no one about that decision. He has been negotiating for two years to abolish WSAC without referring to the House, to WSAC formally or to sport and recreation amenity interests. He laughs because he knows that it is true. He has been conducting clandestine negotiations behind the backs of everyone concerned. No doubt he did that because he did not want any representations to be made.
I shall now deal with the Government's decision to eliminate from our water industry any concept of local government democracy. They have decided to set up purely functional managerial teams to operate the water industry. Every local authority association in the country, Tory and Labour alike, is against that move. Ministers cannot give one example of a local authority supporting the proposal that every elected representative in the country should be removed from every regional water authority.
I shall give way to the Minister for Local Government and Environmental Services if he has something to say that will interest us—it will be the first time today. I see that he does not want to speak. He obviously has nothing interesting to say. Ministers hold local government and local government democracy in such contempt that they can sweep it away with no consideration for the people in


local government. What does the Minister intend to replace local government representatives with? I acknowledge that size has been a problem. I have said before—the Minister has said it and I agree with him—that one of the problems with the water industry is that it was set up on the river basin system. That means that it was founded on a geographical concept. No unit of local government is founded on the same basis, partly because we have no regional government. Perhaps we could turn our attention to that matter at some stage.
If the Secretary of State has a problem with the size of an authority, the Opposition have much sympathy, and will help to rectify the matter. Each of the authorities should be a more workmanlike-sized executive authority, provided that it is accountable to the water authority. That is what should have happened. One does not deal with a problem of the size of an undertaking not matching the size of the local authority by eliminating democracy. Ministers should not have proceeded in that way.
The Opposition have the greatest misgivings about appointments that the Secretary of State is likely to make. I say that having examined the appointments that he has made since coming into office. He has reappointed one Labour man but the others have never voted Labour or Liberal in their life. The hand of the Tory Central Office looms large in the Minister's appointments.

Mr. Ted Graham: It is a back-hander.

Mr. Howell: When the Labour Party came to power in 1974 and inherited the water industry, every chairman of regional water authorities was a Conservative supporter. We are returning to that circumstance. In 1974, I tried to work with those chairmen. I gradually changed matters so that some Conservative chairmen remained but Labour and Liberal supporters were also appointed to achieve a balance. We should not have to do that again. We should not reach the point where supporters of the party in Government—any party—govern industries. That is not acceptable.
I give firm notice that if the Bill becomes law before the next general election and appointments are exclusively in favour of Conservative supporters, the Opposition will not accept them. Each of those appointments will be reconsidered and resignations will be required if necessary.

Mr. King: That is disgraceful.

Mr. Howell: It is not a disgrace. If the Government do not want that to happen they should consult the House about appointments and demonstrate that they are trying to keep a balance in what amounts to the 10 separate nationalised industries that they are establishing. The Opposition will not tolerate a return to the earlier position.

Mr. King: I understand the right hon. Gentleman's point but his charge is monstrous. Of the reappointments that have been considered, the only one that has been made was of what, I imagine, is a Labour supporter. I should like the right hon. Gentleman to confirm that he shares our view that the industries are important and that the quality and ability of the person concerned is the first consideration.

Mr. Howell: Public confidence is also important. I specifically said that the one reappointment that the

Secretary of State made was the Labour chairman of the South-West region. I then said that the four new appointments all fitted into the category that I outlined—those approved of by Tory Central Office. That is not the way to find 10 chairmen to run the 10 nationalised industries that we are told the Bill will create.

Mr. Campbell-Savours: Will my right hon. Friend address himself to a problem that affects the constituencies of a number of Labour Back Benchers, that of the Government Chief Whip and also that of the Home Secretary? I refer to the arrangements made by water authorities to finance the bailiff services under the rivers provisions of the water authorities. There is some feeling in Cumbria that these services may have to be reduced under the new structure in order to comply with the more commercially oriented views that will be expressed by the new boards governing the water authorities. Does my right hon. Friend not think that a service which has always been regarded as crucial in maintaining rivers in areas such as the Lake District must be kept? There has been no guarantee by the Government that this will happen under the new arrangements.

Mr. Howell: That is an interesting point which had not previously been brought to my attention. If what my hon. Friend says is right, it is a matter of some concern. I hope that I can persuade my hon. Friend to serve on the Standing Committee on the Bill to ensure that this matter is discussed.
The Bill destroys the Water Space Amenity Commission. Just as all the local authority associations are united in their opposition to what the Government are doing to their interests, so, by common consent, as far as I can discover, all the members of the commission—the Sports Council, the Countryside Commission, the Nature Conservancy Council, amenity groups and the millions who enjoy water activities—agree that this is a retrogressive step for the Government to take.
I notice that the Minister turns to his hon. Friend the Member for Bury St. Edmunds for support. The hon. Member for Bury St. Edmunds, who was responsible when the Water Act 1973 was going through the House, used a phrase in Committee that has become famous throughout the water industry. The hon. Gentleman described the then Conservative Government as creating the fourth dimension. This meant that recreation, sport and the interests of campers, caravanners, bird protectors, anglers and boaters and the millions interested in leisure would occupy a place central to the development of the water industry. The Water Space Amenity Commission ensured that this happened.
There were some battles in the early days with the regional water authorities over protecting the interests of consumers and ensuring access to the countryside and to property owned by water authorities. Now the commission is to be abolished by the Government and nothing put in its place. The Minister intends leaving matters to the regions. Are we to understand that if, in future, the Sports Council, the Countryside Commission or the Nature Conservancy Council wish to negotiate about water space amenity, they have to be involved in 10 separate negotiations with each region that the Government are setting up? That is nonsense. The only solution is to set up some national authority.

Mr. Eldon Griffiths: If I am fortunate enough to catch the eye of the Chair, I may say something about the Water Space Amenity Commission. The right hon. Gentleman, with his knowledge of the water industry, will recall that the safeguard for the fourth dimension, which all hon. Members, I believe, treasure, is the statutory requirement on each water authority to develop its water space for that purpose. That requirement remains under the present Bill.

Mr. Howell: If the hon. Gentleman is right in his contention, the logic is that we have 10 water space amenity commissions instead of one. The proposal that there is any justification in the economics of this operation is washed away immediately. Of course, we cannot have 10 commissions. Even if the hon. Gentleman is right, how is one to achieve national input into the regional situation? How does one tell the North-West water authority, responsible for the great lakes and some of the most treasured part of our national heritage, that its obligation is not specifically to the people of the North-West, but that there has to be a national interest and involvement in, access to, and development of, the water industry? How is that done? The hon. Gentleman cannot say. Nor can the Minister say. The fact is that it cannot be done. By the nature of things, a regional authority will give first priority to the interests of the people in the region rather than to the national interest.
Even the Severn-Trent authority and bodies of that sort have come out against the Minister. We shall fight the Bill hard in Committee. It treats local government, the water industry and recreational and sporting interests with contempt. It treats trade unionists and consumers with contempt. No one should be surprised. It is a Bill that comes from the most contemptible Government in our history.

Sir William Elliott: I cannot say that I am extremely pleased to follow the right hon. Member for Birmingham, Small Heath (Mr. Howell). In introducing the Bill, my right hon. Friend said that it was not a long measure and not, as he saw it, terribly contentious, but that he suspected that the right hon. Member for Small Heath might treat it as one of the most savage pieces of proposed legislation to come before the House. That has proved to be the case. I fail to see how the Bill or the actions of my right hon. Friends the Secretary of State and the Minister for Local Government and Environmental Services are in any way prejudicing the present wage negotiations between employers and union representatives. It is beyond me how the right hon. Gentleman contends so firmly and savagely that this amounts to Government interference.
I agree with the expressed irritation of my right hon. Friend the Minister for Local Government and Environmental Services when the right hon. Member for Small Heath referred to the appointment of chairmen of regional water authorities. I have no knowledge whatever of Conservative Central Office having anything to do with these appointments. I am certain that this has not happened. I agree with my right hon. Friend that merit, and merit alone, is taken into account when those appointments are made. I am told that, when the vacancy occurred recently for the Northern regional water authority, a number of people of the highest quality were interested in the post. I understand that it was extremely

difficult to make a choice. I am sure that the political sympathy of the person who is now chairman of the authority was a minor consideration, if a consideration at all. I know only that he is highly respected in northern public life and has given a great deal of public service across a wide sphere. It was a very good appointment.
As is customary, I wish to declare an interest. I am chairman of the Newcastle and Gateshead water company. I also have the privilege at this time to be honorary president of the Water Companies Association. The relationship between the 28 statutory water companies and the National Water Council has been a good one. I join my right hon. Friend in paying tribute to Lord Nugent, the first chairman of the National Water Council, for the excellent job that he did and to his successor Sir Robert Marshall. As many of those with knowledge of the water industry are aware, there was a great deal of work for the National Water Council to do. Its initial task is now completed, and a new era begins. The relationship between regional authorities and the water companies has also been good.
I welcome clause 5. We are unique in England and Wales in having the complete water cycle managed on river basins. This has led to highly developed and co-ordinated management of water services. A higher percentage—96 per cent.—of our population is connected to water supplies than anywhere else in the world. We have a long history of innovation in water supply and sanitation, and we have been instrumental in the development of many technologies. The water authorities and the statutory companies are in a unique position to assist developing countries in British techniques and processes and in the operation of British equipment.
Authorities and companies are already doing much to assist United Kingdom manufacturers and exporters by allowing their installations all over the country to be used as show cases. The water companies and the regional water authorities, unlike other nationalised industries, do not have clearly defined powers to exert their ability to export their expertise. This has been detrimental to their earning capacity and to the support that they wish to give the industry to obtain overseas orders. Clause 5 seeks to give these powers, and I warmly welcome it.
With regard to clause 7, the statutory companies will certainly wish to be involved in future arrangements for representation of consumer interests. The record of the companies in public contact is very good. Invariably and inevitably they have kept in close contact with their customers. Their record in dealing with breakdowns or stoppages has been very quick. The right hon. Member for Small Heath criticised the removal of the local authority content in the future of the industry under the terms of the Bill, but I emphasise that the companies have been careful to keep well in touch with the local authorities in the areas of their operation.
Several times a year, the companies invite representatives of local authorities to see installations and to have explained to them how the water company is going about is work. Through this method of constant contact with local authority representatives the customer has been kept in close contact with the company and its work. This is a good thing.

Mr. Robert C. Brown: The hon. Gentleman refers to very pleasant occasions, and, as a city councillor, I have taken part in them for many years. However, there is a vast difference between


what is, in essence, a social meeting once a year with the chairman and the directors of the Newcastle and Gateshead water company and the representatives of the Newcastle city council, and direct representation of the consumer by the elected members of the city council. That is the argument.

Sir William Elliott: I am glad that the hon. Gentleman has enjoyed his visits—

Mr. King: So far.

Sir William Elliott: —so far—to the Newcastle and Gateshead water company's functions, but I hasten to say that those occasions are far from merely social, as the hon. Gentleman is well aware. I have presided over some recently. We are at great pains not only to give reasonable hospitality but to make sure that our officials and others explain exactly what the company is doing and how much it wishes to keep in touch with its customers who are represented on local authorities by the guests on those occasions. This is a good practical method by which water companies keep well and truly in touch with their customers.
The setting up of vast machinery for consultation can be somewhat dangerous. The setting up of commissions to look into complaints in other spheres of industry has, in my experience, led to the creation of complaints. There is a great deal to be said for smallest being best, and for close contact between water suppliers and their customers.
The dissolving of the National Water Council and the Water Space Amenity Commission will represent, as the Bill suggests, a considerable financial saving. I hope that there will continue to be a national water industry which, through efficiency and cost saving, will continue to give the excellent service to the consumer that it has given in the past. I support the Bill, and commend it to the House as a step forward to a more efficient water industry.

Mr. David Lambie: Although I am a Scottish Member, I do not apologise for participating in this debate on an English Water Bill, as it will have consequences for regional water authorities in Scotland, including in my constituency, and will affect water interests in Wales.
I am glad to welcome one of the junior Ministers from the Welsh Office to the Front Bench today because it shows that the Welsh Office has some interest in the effects and the consequences of the Bill on the people of Wales. Mr. Deputy Speaker, have you any power to summon the Secretary of State for Scotland to take his place on the Front Bench today, or even a junior Minister such as the Under-Secretary of State for Scotland who represents local government? Can you call them to take their places to look after the interests of the people of Scotland?

Mr. Deputy Speaker (Mr. Paul Dean): I cannot help the hon. Gentleman. It is nothing to do with me who is in any part of the House.

Mr. Lambie: In that case, can the junior Ministers at the Department of the Environment send for the Secretary of State for Scotland or the Under-Secretary of State to take part in this important debate? At Question Time a point of order was raised by one of my Scottish colleagues,

complaining that yesterday the Secretary of State for the Environment announced on the Floor of the House a number of new enterprise zones in England and Wales, and that Scottish Members were insulted by having a similar announcement affecting Scotland made by way of a written answer and a press conference in Edinburgh.
The Scottish Members have been insulted by the inattention of Scottish Ministers to this important debate. Those of us who believe in devolution for Scotland, and perhaps a wee bit more than devolution for Scotland, recognise that we should meet in Edinburgh because we should see the Secretary of State for Scotland more there than here in any future debates.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): The hon. Gentleman will understand that this Bill applies to England and Wales, but not directly to Scotland except in those matters concerning the training and research facilities where there are common services paid for in part by both Scotland and Northern Ireland. However, there is no direct relevance to Scotland.

Mr. Lambie: I am speaking because I wish to deal with the training arrangements of the National Water Council. The people in Scotland are affected by them and by the regional water authorities, the river purification boards, and especially the training centre at Melvin House, which happens to be in my constituency.
The consequences of the Bill are in the melting pot. There is nothing in the Bill to say how the functions of the National Water Council are to be handled after September 1983 when the council ceases to exist.
As the Minister has already said, Scottish water supply is administered in a way that is quite different from England and Wales, and Scotland is marginally affected by the Bill because some functions undertaken nationally by the National Water Council will have to be adjusted when that body ceases to exist. Training has been operated nationally, including Scotland and Northern Ireland, by the National Water Council. It has been reported that the chairmen of the regional water authorities in England are now discussing how they can incorporate training functions in the duties of their proposed association. Scottish authorities will have a direct interest in those discussions.
The National Water Council Melvin House training centre is located at Kilwinning in my constituency. If the Bill goes through unamended, the jobs of the nine professional training staff and 24 administrative and domestic staff will be at risk. The activities at Melvin House affect the constituency of every Member of Parliament in Scotland and Northern Ireland. The training centre provides a comprehensive service to regional council water and sewerage departments and to the river purification boards in Scotland. In Northern Ireland, it provides a similar service to the Department of the Environment water services.
Melvin House was established under the Industrial Training Act 1964 as the water supply industry training board. The staff and assets were transferred in 1974 on the establishment of the National Water Council. The training division in Scotland enjoys an excellent relationship with the participating bodies which since 1974 have participated fully on a voluntary basis. Melvin House is proud of its reputation and would very much like to continue its functions in the future.


When the consultative document was published just before the Summer Recess, I contacted the Under-Secretary of State for the Environment and inquired how the Bill would affect the National Water Council's training facilities. In a letter dated 8 October 1982, the Minister replied:
The National Water Council has hitherto managed training for the water industry on a United Kingdom basis. The paper therefore asks the water authorities and water companies in England and Wales, and the water authorities in Scotland, to decide what the future arrangements for training in the industry should be. It is up to these bodies themselves to decide on the future scale of centralised training, and the basis for owning and managing the assets. You will note that one possibility specifically mentioned is the establishment of a separate body for Scotland or Scotland/Northern Ireland.
Perhaps the Minister will bring the House up to date on the Government's thinking on that suggestion. The Minister added:
We are now considering the responses to the consultation paper, including the comments of the Convention of Scottish Local Authorities".
I draw the attention of the House to the comments of the Scottish Sub-Committee on Training, which were placed before the Minister earlier this year. It stated:
The Sub-Committee expressed its strong disapproval, not only of the content of the consultation document, but also of the manner in which the document had been presented … In the field of training, the Sub-Committee considered that the existing system worked well, and that the NWC Training Division had over the past 15 years built up a training organisation which, because of the close liaison and consultation with the industry in Scotland and in Northern Ireland, catered most competently for the industry's training needs. The training pattern so developed had contributed greatly to the more efficient and economic use of the workforce.
It added—and I stress this point:
The consultation paper's reference to the need for training to be provided at a lower level was noted, but it was agreed by the Sub-Committee that this can be done only where adequate resources are available, which is not the case in Scotland, either with the Local Authorities or with the River Purification Boards.
That is why I am disappointed that neither the Secretary of State nor the Under-Secretary of State for Scotland is present. If the Government are not prepared to provide extra resources from London to continue training for the workers in the water and sewerage industries in Scotland and Northern Ireland, the resources should be provided by the Secretary of State for Scotland through the Scottish Office Vote.
The Scottish Sub-Committee on Training also states:
The advantages of a national training scheme are numerous, especially in the areas of managerial, professional and technical skills, where there is great opportunity for exchange of ideas, methods, practices, etc., among the trainees themselves. It would be most regrettable were yet another link between England and Scotland to be broken.
My own opinion is that the sooner the parliamentary links between England and Scotland are broken, the better it will be for the people of Scotland. We might then get Scottish Ministers who reflect the opinions of the Scottish people rather than Ministers who do nothing but issue press statements from Edinburgh instead of answering these points on the Floor of the House of Commons.
The comments of the Strathclyde regional council to the Convention of Scottish Local Authorities are typical of how the regional water authorities feel about the consultative paper. On training, Strathclyde regional council states:
The present style of training developed over some 15 years has contributed greatly to the efficient use of the workforce and consequently to economies in the costs of activities. There is no

doubt that the training scheme is amongst the best available to any group within the local government sector and a vigorous campaign should be mounted to maintain the national scheme status quo, or something very close to it.
Such a national campaign can be led only by the Secretary of State for Scotland. Unfortunately, at present, we have the army but we have lost the general. I do not know what press conference he is attending or what announcement he is making today, but the right hon. Gentleman should be here to deal with the Scottish aspects of the Bill.
The Strathclyde regional council also states:
The consultation paper also emphasises 'need assessment of training at the local level'. This is difficult to do if there are no longer suitable establishments for training or an organisation capable of providing outside specialists and in-house instructors for both staff and manual employees.
That is the main point that I wish to stress. There is a need to continue training, especially at Melvin House in my constituency, not only for the workers in the water and sewerage industries in Scotland and Northern Ireland, but for workers in the North of England. We have provided an efficient service for the last 15 years, and it seems wrong that, just because successive Governments have made a mess of the water supply in England, the people of Scotland should also suffer. We have no water supply problem. In Scotland, the regional water authorities are the controlling bodies for the water supply industry. There is no political problem, but in spite of that our training facilities could be eliminated by a Bill which has been presented for Second Reading when the Secretary of State for Scotland is not present.
Secondly, we were able to organise our water, sewerage and river management on the basis of large river basins. That too was an engineering solution to a political and administrative problem. There have been arguments about the precise frontiers of those regional water authorities but, none the less, they too have worked well. They are the envy of water industries of much of the rest of the world.

Mr. Eldon Griffiths: During the early 1970s three pieces of Government reorganisation were enacted with varying effects. They were the reorganisation of local government, the National Health Service and the water industry. I believe, Mr. Deputy Speaker, that you were involved in one matter and I was involved in both the others. Neither the reorganisation of local government nor that of the water industry has been regarded nationally as an example of the most sublime Government success in managing our national affairs.
This Bill is essentially an amendment to the Water Act 1973. That Act, which has been frequently abused, has rendered our country four specific improvements. First, it brought together the rivers, water supply and sewerage in a single hydrological cycle. That made it possible for us to manage our water and sewerage services better than anywhere else in the world. That is something of which we should be proud. It was an engineering solution to a political and administrative problem and has generally worked well.
The third advantage is one of which all Governments can be proud. We have cleaned up our polluted rivers more successfully than any other industrialised country. I take pride in the fact that one can now catch an occasional salmon and numerous trout in the River Thames. The


River Trent, which was once the industrial sewer of middle England, is now on its way, painfully and slowly, towards becoming a fishing river. These dramatic improvements in the quality of our rivers must be seen against the background of the 1973 Act.
Although all hon. Members will not agree, I believe that we also were right to save the private water companies. It would have placed an enormous burden upon the taxpayer if there had been an attempt to nationalise them. The fact that private water companies have worked alongside the public water authorities, each benefiting from the other, is a tribute to the mixed economy. It shows what can be achieved by agreement. Those are some of the achievements of the Water Act 1973.
This Bill now seeks to amend that legislation. Clause 1 alters the constitution of water authorities. It will make them much smaller. They will each have between nine and 15 members instead of 36 to 62. The new smaller boards will be appointed exclusively by Ministers. This is the final break with the local authorities. I understand their distaste.
It is worth explaining why in 1973 we kept that local government link, although I am sure that the Under-Secretary probably knows this already. If we had broken the link with local government, in the first place, it would have involved removing in one fell swoop all water, sewerage and river functions and all the capital equipment, experience and know-how that they had built up over generations. In the after-glow—if that is the correct word—of local government reorganisation, it would have been politically difficult to take all that away in one Bill, so I believed it right to retain their link with the new water industry by allowing the local authorities to have some access to the new authorities. That was achieved by allowing them to put up their own representatives to the authorities.
The Government, of which I was then proud to be a member, also wanted to avoid all-out nationalisation. We therefore took the decision to keep local government involved instead of setting up an all-out state water industry. I believe that both those decisions were right.
Water is one of my abiding passions, but time and circumstances change. I have thought a good deal about it and my conclusion is that the Government are now right to change to smaller, mainly executive, boards which will be able to handle this large capital-intensive industry more efficiently. I regret the passing of the local authority link, but I believe that in management terms the decision in clause 3 is right.
One of the many reasons for reaching that conclusion is that experience has shown that local authority members on water authorities too often have fought their own corner. They regard themselves as delegates from specific counties or cities instead of taking a broader view of the interests of the region as a whole. By doing that they have worn out their welcome, and I have reached the conclusion that the time has come for them to go. Water is too important an industry, involving too many vital services and too much public capital, to be allowed to run any longer without tighter decision-making machinery. This Bill will provide that.

Mr. Ogden: The hon. Gentleman is being disarming. If he is using the argument that the water industry is too financially large and important, surely he recognises that those who run local government control more important functions involving much more money.

Mr. Griffiths: That is another point of view.
Clause 3 provides for the abolition of the National Water Council. I should like to be associated with the tributes that have been paid to Lord Nugent, whom I had the pleasure to appoint, with the Secretary of State's support. He started it well and his successor followed up effectively. On balance, it is probably right to wind up the National Water Council, but I must ask the Minister one or two questions on matters about which I am anxious.
The right hon. Member for Birmingham, Small Heath (Mr. Howell), who has been involved, as I have, with the water industry for a long time, raised the matter of national pay negotiations. I understand that the Government intend that they should be henceforth a matter between employees and employers. I have some doubt about the practicality of national unions negotiating with individual local water authorities. There is a discrepancy here and it could be difficult. For example, I have been involved in national negotiations on pay for the police service. It would be extraordinarily difficult if one had to deal on behalf of the national staff side—mainly the Police Federations of England and Wales—with a number of different police authorities.
I hope that in Committee my hon. Friend can demonstrate that the machinery will work for negotiating between employees represented by powerful national unions and a series of separate employers with different circumstances and revenues and perhaps a different view about what is appropriate.
I wonder, too, what will happen to the organisations that are still the industry's pride, such as its research and training capabilities. These assets must be properly handled. I do not know where the responsibility is to reside if henceforth the machinery lacks a national co-ordinating body. Nevertheless, I understand the Government's judgment that the National Water Council should go, and with my two reservations I support the decision.
The Water Space Amenity Commission was set up in the full flush of enthusiasm to make our water space available for sport, recreation and other amenities. It complemented the statutory duty that we placed on water authorities. I pay tribute to Mr. John Humphries, the first chairman, who operated with a small budget and had some difficulty at first in dealing with many of the water authorities. He launched an excellent magazine telling us about the development of water space amenity. On an average weekend more people mess about in boats on our internal waters than are to be found on the football terraces. We should recognise how important water space has become. Once the Water Amenity Space Commission has gone, I hope that we shall have a mechanism to monitor how the individual water authorities perform their statutory duty without it. We need to know that they are not neglecting their duty. Perhaps the Minister should report to the House on how they are handling this duty to develop our water space for amenity and recreation.
Clause 5 deals with the powers to offer and promote water and sewerage consultancy services overseas. It makes good sense to bring forward this clarificatory power. Two-thirds of the world is dry and badly needs


better to recycle its water. Our industry has a great deal to offer. Consultancy services arising from the efficiency of our industry can contribute mightily to our invisible earnings. The clause is a great encouragement to that end.
Clause 7 sets out the arrangements for better communication with consumers. I freely confess that we did not handle the issue properly in the 1973 Act. Change is long overdue, but I have one small criticism. There is too much power given to the Department to prescribe methods. There will be variation between wide rural areas such as that covered by the Anglian water authority or the South-West authority and the heavily industrialised areas. Their problems and perceptions are different. Too many of Bill's powers lie with the bureaucracy. The details are set down too precisely. If my hon. Friend the Minister or the Under-Secretary of State were handling the matter, there would be no problem, but Ministers will move on to their other duties and the officials, estimable though they are, will monitor how the authorities perform their new statutory duties. I believe that these controls should be loosened in Committee.
Clause 8 deals with equalisation. I spent six mornings in Committee on this extraordinary measure brought forward by the Labour Government before the last election to help them hang on to a few Labour seats in Wales. It did not work well and it is high time that we got rid of it.

Mr. Denis Howell: We were trying to do justice to the Welsh people, but the measure also helped the people of East Anglia and Northumbria. The fact that some of those people voted Conservative shows how statesmanlike our approach was.

Mr. Griffiths: As the Anglian water authority benefited from the measure, I showed great statesmanship in Committee in demonstrating that it was nonsense.

Mr. D. E. Thomas: What proposals do the Government have before the next election to retain Conservative seats in Wales?

Mr. Griffiths: The only proposal necessary is that the good sense of the Welsh people be allowed to prevail.
Water metering is a vexed question. Many of our water authorities have been slow to get on with it. I have consequently had a good deal of correspondence with my hon. Friend and others. It is absurd for water authorities to insist on a £10 survey fee before they will look at a house to see where a meter should be put. This applies particularly to terraced houses. It is equally absurd to propose charges as high as £80 or £90 for a simple piece of equipment. Progress is being made. I hope that the Government will ensure that the industry more quickly establishes a just and equitable basis to charge for water and sewerage services.
Incidentally, it is nonsense to say that water can be charged for but it is difficult to make sewerage charges. The amount of water that goes into a house and that which comes out is exactly the same. [HON. MEMBERS: "Oh, no, it is not."] It is almost exactly the same, and the matter can be handled sensibly.
As we move towards smaller and more efficiently managed executive boards for our water authorities and abandon the superstructure of the National Water Council and its various bodies, it will be all the more important that each regional water authority accounts for what it does. Their accountability to consumers is improving but there

must also be better accountability to the House. I hope that the Government are not heading towards nationalisation. I do not believe that that is their intention, but there is a risk that the industry will be pulled more and more into the central bureaucracy of the Department of the Environment. The Secretary of State's innovation in local government—the concept of an efficiency audit to be reported to this House—should also be introduced in the water industry.
The Under-Secretary of State will know of the debate on this subject some months ago. As the Bill proceeds, I therefore hope that the Government can organise an auditing system through which the House can be informed as to how well or how badly the new and more efficient authorities have handled all their statutory duties, such as the supply of pure water, drainage, river management, and their duties towards amenities and recreational activities. Such an audit would make the new administrative machinery more acceptable to the nation.

Mr. Stephen Ross: The hon. Member for Bury St. Edmunds (Mr. Griffiths) has a much greater knowledge of water authorities than I have and I agree with him entirely about the reasons why they were restructured thus taking the river basins into the present regions.
In my constituency we experimented uniquely in having a joint river and water authority. The system worked well but the authority had insufficient capital to cope with the continuing problems. However, I am grateful that the Southern water authority has already laid an additional pipeline under the Solent and that it has supplied more water to parts of the island that were severely affected by drought.
At long last, the Southern water authority is also doing something about our appalling sewerage system. Hon. Members who attend Cowes week will know what I am talking about. I am ashamed to say that there are about 52 outlets of raw sewage into the River Medina and the Solent, which is only one part of the island. The sewage problem is enormous and cannot be tackled unless we have a regional authority with the resources to do the job.
I also agree with the hon. Member for Bury St. Edmunds about private water companies. I remind the right hon. Member for Birmingham, Small Heath (Mr. Howell) that I played a small part in keeping those companies private during the Lib-Lab pact. I remember being called to his office when he was a Labour Minister. He read to me the Bill that was to set up a national water authority and told me how the private water companies would be nationalised. When the then Minister reached that point I said, "Sorry, that is not on." The right hon. Gentleman said "I thought that you would say that. I shall have to get out version two that omits those words." Consequently, we did not get a national water authority, nor were the private water companies nationalised. Since then, I have been about the sole non-Conservative to be invited to the private water companies' luncheon held annually in July. I am sorry that the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott) is not here. The speeches at the luncheons are highly political but I enjoy the hospitality very much.
I have visited some private water companies and I can say that most of them are extremely efficient and that it was correct to leave them alone. I hope that we shall never nationalise them.

Mr. Denis Howell: I do not dispute the hon. Gentleman's outline of the history of the water authorities, but would he comment on the interesting point made about private water companies by the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott)? If we must replace all local authority representatives by a consumer council—a signal failure in other nationalised industries—should not the consumer councils oversee the private companies as well as the regional water authorities?

Mr. Ross: The private companies have shareholders to whom they are answerable. Generally, one does not hear complaints about the private water companies. I do not like consumer representation and I do not believe that it will work.
I am sorry that the Minister for Local Government and Environmental Services, for whom I have considerable respect, chose to introduce this Bill. It is a useless and unnecessary measure that takes us backwards. I do not dispute the fact that the administrative boards of our regional water authorities are top-heavy. However, the solution adopted by the Government, based on the Monopolies and Mergers Commission report of June 1981, is profoundly mistaken. One can only deplore the fact that the Secretary of State and his Minister should reserve the power of appointment of all members of the authority, which are to range in size from nine to 15 members. As we have seen elsewhere—the evidence can be provided—the arrangement will almost certainly lead to jobs for the faithful, who will, of course, be loyal party hacks. Patronage must never be allowed to replace the choice of the electorate.
One need only examine the Government's record to know that what I and the right hon. Member for Small Heath are saying is, unfortunately, true. The Department of the Environment is rapidly beginning to resemble the Kremlin and is taking on more powers that should remain with the local authorities. This Bill and yesterday's Transport Bill are further examples of that trend. I watched the funeral of Mr. Brezhnev yesterday and I wondered whether we should not extend the reinforced concrete wall around the Department of the Environment building and bury the present Ministers under the foundations. Why should we not direcly elect our representatives to the water authorities every four or five years? One county or a group of counties could elect a representative, while a few members, who should be in a minority, could be appointed by the Minister solely for their expert knowledge of the subject. There are many such people in Britain and they have an important role to play. One such person, Brigadier Hopthrow, is still alive and kicking in my constituency. He used to advise the CBI and I expect that the hon. Member for Bury St. Edmunds knows of him. It is sad that he disappeared from the scene after reorganisation.
If that solution is unacceptable, a county should appoint its own member who must report to the quarterly meetings of the county council. That procedure was adopted recently in my county council, whose representative on the Southern water authority reports to the elected members, who can question him. However, direct election is preferable because the public would know their representative and where to contact him. At present, complaints about water charges, sewerage problems and cesspit costs nearly always land on the desk of the local Member of Parliament.

Mr. Eldon Griffiths: The hon. Gentleman's remarks are interesting, but there is a practical problem. In one large water authority area, there may be as many as 10 county councils. That would mean automatically, under his system, 10 representatives. How would the hon. Gentleman overcome the problem of the representatives fighting their own corners on the board?

Mr. Ross: I said "county or group of counties". I have examined the figures and Severn-Trent water authority, for example, comprises 46 members representing many councils, including one in Wales. In some areas, counties must agree on a joint representative. Members of the European Parliament are elected directly and we have a Wight and Hampshire East Member. I see no reason why Sussex East and Sussex West cannot elect one representative, although of course I hope that the Isle of Wight will have its own representative.
What is wrong with fighting one's own corner? Someone should do just that. That is what Members of Parliament do when trying to look after their constituents. My fear is that from now on there will be no local representative to fight local causes.

Mr. Mark Lennox-Boyd: How does the hon. Gentleman distinguish between consumers of water and consumers of gas and electricity? Would he have elections for everything?

Mr. Ross: Yes. The right hon. Member for Small Heath has apparently also been converted to that concept and of course it has already happened in Scotland. Consumer representatives on electricity boards, post office boards and telecommunications boards are utterly useless. I know that that will cause many people to write to me saying that consumer representatives have achieved much, but they have not. When we were fighting to retain the words "Isle of Wight" on our envelopes, the consumer representatives did little to help us and the battle was taken up by the local authorities and the Member of Parliament. Consumer representation will not work in this case. Direct elections to the authorities are the only answer. Health and water authorities and arts and sports councils should be controlled directly, but I do not expect this Administration to embark upon such a radical project.
If the Bill is to go through as now drafted, may I plead that the regional water authorities should be obliged to report fully to their Members of Parliament at least every six months? In that regard, I agree with the hon. Member for Bury St. Edmunds. Once a year members of the water authorities spend a couple of hours in a committee room and matters are generally glossed over. Only when there is a huge increase in the rate, or something like that, are all the members present. That is when they have a bit of a rough ride. In other cases, matters are glossed over. That is not good enough. The members must be there for a full day's session, to enable hon. Members to represent their constituents and to cross-examine the officers. That would be an advance on the proposed consumer committee which, as I said earlier, experience shows has few teeth when its services are needed.
I do not know why we want to do away with the National Water Council. It is obvious from the Bill that it will have to be revised in some guise or other if the functions that it performs are to be continued. We have heard about training, overseas sales, pay negotiations, superannuation, information, advice and policy. Why on


earth destroy the very body that is doing those jobs at the moment? Is this the time to do away with the innocuous Water Space Amenity Commission? I am delighted that more and more people are taking up inland water sports. We know that leisure activities will form a big growth area in the future. That body is performing a sensible role and should be maintained.
In short, I believe this to be a thoroughly bad and unnecessary piece of legislation which should be strangled at birth. That view is shared by the Association of County Councils and the Association of District Councils. Here, I must make an apology because I misrepresented the views of the ADC in the debate on the Transport Bill yesterday. I had had a rather good Beaujolais lunch and I think that that had something to do with it. I apologise to the House and to the ADC. However, the ACC and the ADC are certainly against this measure, as, I am sure, is the Association of Metropolitan Authorities. The breakdown of the link with the borough and district councils is a serious matter and one which I am convinced in due course the Government and the country will live to regret.
That leads me to a question that I have been asked to pose. It concerns the problem of responsibility for the repair of sewage interceptor traps which, I gather, particularly arises in the Merseyside area. It is apparently a no-man's land. It is not clarified in legislation which goes back to the Public Health Act 1936. Those traps are now collapsing and neither the local authority nor the regional water authorities accept liability for their repair. I ask that the opportunity be taken to clarify that matter in the Bill to establish who is responsible for the work. Clause 6 might be suitable for such an amendment. I should be grateful if the Under-Secretary of State will mention that when he replies.

Mr. Tony Durant: I welcome the opportunity to speak in the debate. The hon. Member for Isle of Wight (Mr. Ross) seemed a little confused about public representation. He cannot, on the one hand, attack the Government for suggesting consumer councils, which he says are ineffective, and, on the other hand, say that the present system is ineffective. He even decried it, saying that it was not 100 per cent. effective and that perhaps something else should take its place.

Mr. Stephen Ross: I apologise if I did not make my point clearly. I agree entirely that the administrative boards must be much smaller—with approximately nine to 15 representatives. We should directly elect those representatives—one per county or even one for perhaps two counties together. People should know who their representatives are and should elect them.

Mr. Durant: May I return to that later in my remarks?
The right hon. Member for Birmingham, Small Heath (Mr. Howell) implied that there had been no consultation with the local authority associations—the Association of District Councils, the Association of County Councils and the Association of Metropolitan Authorities. I have a document which came out in July. It is 14 pages long and was sent out to all the authorities for their views on the Government's proposals. I am rather puzzled why the right hon. Gentleman said that there was no consultation. I

accept that there was no public consultation, but the document was sent out to about 140 organisations involved in the water industry.

Mr. Denis Howell: The first consultation document about the future of the water industry was issued by the Government in January 1982. That was about regional authorities, as is the Bill. It said nothing about the National Water Council or the Water Space Amenity Commission. None of the people consulted about the January document—the main consultation document —knew anything about the proposals or could comment upon them. When the Minister announced from the Dispatch Box in July that he was going to abolish those bodies, he issued a second consultation document about what should be done in the wake of that decision. It is to that second consultation document, after the decision has been taken, that the local authority associations addressed themselves and sent their views to me, and, no doubt, to others.

Mr. Durant: I follow that, but the right hon. Gentleman implied that there had been no consultation. He has now made the position perfectly clear and I do not dispute what he says. However, he implied that there was none and I was anxious to clarify that point.
I support my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) when he says that this is an amending Bill. I welcome it. I have always been a critic of the water authorities. I am interested in the subject because the Thames and the Kennet are in my constituency, as is one of the regional headquarters of the Thames water authority. I have also been active on the subject of waterways.
All hon. Members agree that there is a need for a better water administration. The argument is about the best way to achieve that. If anybody doubts that, they have not been reading their correspondence recently. I have had many letters about the water authorities. Are the water authorities a business, a service or a public undertaking? It is rather an oddball organisation. I do not use that word disparagingly. The organisation does not fit easily into any of those categories. I suggest that it is virtually a business because of its scale.
Look at the size of the Thames water authority. It deals with 1,000 million gallons of water a day. It amalgamated 200 undertakings into one. It covers 5,000 square miles. It serves 11½ million people. It is run by a board of 61 people who try to run that enormous administration. It has a capital budget of £100 million and a revenue expenditure of £400 million. It has 31,000 miles of sewers and 26,000 miles of water main. Think of the size of that operation. It makes British Leyland look pretty small. There is no doubt that it is a big business. There must be good management. It is a capital-intensive industry and crucial decisions have to be made concerning capital expenditure.
We have discussed representation. Not everywhere is represented. As a Member of Parliament I represent a Berkshire seat. There are on the Thames water authority one representative from the county council and one from the district councils for the whole of Berkshire. I know neither of those two gentlemen. I am not complaining about that. It may be my fault for not getting in touch with them. If I do not know them, how does my electorate know them? Surely they are responsible to the electorate.
The hon. Member for Isle of Wight said that it is important that the local authorities have representation in


order to be in touch with the people. He suggested a different way of doing that—I accept that. However, he said that councillors were essential and yet I, a Member of Parliament, do not know those people. They do not automatically come to my attention and I am an elector in my area. The system is obviously not working. Those of us who have been in local government know what happens. At the council's annual meeting the mayor is elected and the committees are appointed. The boys fix up their jobs. All the high-powered fellows do finance and housing. Then there is a long list, which includes such bodies as the Post Office users' councils. The water authority is about No. 4 on the list. Someone asks who should be put on that body and the response comes that last year's mayor is a bit crestfallen because he has nothing to do and that he should have that task. I do not say that that happens every time, but there is a tendency for that to happen. I am not criticising it, because it is understandable.
Nevertheless, enormous management decisions are being taken and it is therefore right to streamline the process. One management decision has come to my attention. A construction firm wrote to me saying that a financial limit had been put on the size of the contracts that it could bid for with the Thames water authority. At that time the limit was £350,000. That was the decision then, although it was nonsense. I entered into correspondence with the Thames water authority and it increased the limit to £600,000. However, some other water authorities allow up to £1 million for a contract. Those big decisions are being taken by other people, and I do not suppose that the elected representatives know anything about it.

Mr. Ogden: A long time ago I was a member of a very small authority. It is not unusual for any organisation to have an approved list of contractors. On the basis of the contractors' record, expertise and financial viability, they are allowed to tender up to a certain limit. If the firms involved carry out the work properly they can go for larger contracts. Therefore, the difficulties outlined by the hon. Gentleman apply not only to water authorities but to any authorities that allocate contracts. It is a practical precaution.

Mr. Durant: I am saying not that the procedure is wrong but that big decisions are being made. A board type of administration would prove much more competent.
I welcome the provisions covering the consumer's interests. I introduced a Ten-Minute Bill which, of course, did not have much of a chance. The Irish were causing trouble at the time and so I lost the Bill. It sought to set up a consumer council for the water industry. Under this Bill that would not be practical, but I welcome the Government's appreciation of the consumers' problems. It has been a cause of mine for some time.
So far, little mention has been made of the fact that the water council has been doubling up on many of the boards' activities. Water research and training, for example, are being done twice. That is another reason for reconsidering the position.

Mr. Eldon Griffiths: Is not part of the trouble that too many of the authorities have wanted to do their own thing? With this reform I hope that there will not be 10 different

research capabilities and 10 different training schemes. There must be an arrangement whereby one major authority acts on an agency basis for all the others.

Mr. Durant: I am sure that that could be done. Indeed, it is done with many organisations. I am not nervous about different elements. I am a diversionist. People can learn different techniques from each other, and I am not particularly worried about people doing their own thing. Therefore, I do not go all the way with my hon. Friend but I support his point.
I was delighted when the Government saved the Inland Waterways Amenity Advisory Council. It can carry out much of the WSAC's work if it is given the opportunity. It is representative of all the leisure interests, including boaters, fishermen and walkers. They are all members of the IWAAC and it may be able to take on some of the WSAC's duties.
The Welsh are very keen about water equalisation. However, it cost the Thames water authority some £5 million. As a householder, I had to pay some of that amount. Therefore, like the hon. Member for Isle of Wight, I shall speak for my constituents because they objected strongly to supporting the Welsh water authority. The rainfall in Wales is much higher than in Reading. If the water authorities in Wales had been more constructive and had been better at conserving their water, they might not have had to take that step.
The public have criticised water authorities for their standing charges. People have become used to direct charges and their main criticism now concerns the standing charge. For example, an elderly person may live in a small house with only a couple of washbasins and a small loo, yet face enormous standing charges. A shopkeeper came to see me and told me that he had one small washbasin and a loo at the back of the shop. It is used three times a day, but the water bill is enormous. That is incredible. I hope that the new water authorities will consider the standing charge. That, and not the amount consumed, is the principal grievance.
Bureaucracy has also grown enormously. The comparatively new chairman of the Thames water authority has tried to do something about it. Manpower figures have dropped and I am impressed by the work that he has tried to do. However, the bureaucracy remains vast. I visited a multinational company in my constituency that occupied one floor in an office block. The chairman said that he would try to reduce the number of those working there. I think that I met two people there. However, the chairman thought that the overheads were too great. He then took me by my coat collar, dragged me to the window and pointed to a building on the other side of the road. He asked what the devil I was going to do about that place. It was a building for one division of the Thames water authority, yet there were 12 floors. Somewhere along the line bureaucracy has got out of control. The new management boards can pursue that point vigorously. The Thames water authority has been restructuring itself, advisedly, and making divisional structures to streamline management. It has been proceeding in the right way and this new idea may help.
However, there has been talk of doing away with the Thames Conservancy. That is a pity. The Thames is one of the best controlled rivers in Britain. It is well run and


is an example to the rest of the world. However, the matter is still under discussion and we shall have to see what happens.
I can only praise the general concept of the water authorities as set up by a previous Conservative Government. Water standards are superb, sewage disposal is excellent and there has been extremely good marketing abroad of many of our concepts. We have made a lot of money from selling our expertise abroad. However, there is a need for change and reform and this amending legislation is a step in the right direction.

Mr. D. E. Thomas: The hon. Member for Reading, North (Mr. Durant) made two points with which I agree, at least in terms of analysis. He said that we had to decide whether the water supply industry was a business or a service. Indeed, that theme ran through his speech and was highlighted in his comparison of the Thames water authority with a multinational company. However, he did not tell us what that multinational company produced.
Over the years, the water industry has changed and is no longer a service that is run by the local authority. Most of the local water undertakings in Wales were running at a loss and were being subsidised from the general rate. The position in England is different, as the Daniel committee found in 1975. As a result of the move towards considering water as a large business undertaking and as a commodity to be sold to the consumer rather than a service to be supplied, the direct charge on the consumers has increased substantially, the structure of the industry has changed and the industry has become more a corporation and less a locally sensitive service.
I agree with the way in which the hon. Member for Reading, North posed the problem. Those of us who represent constituencies that have both high rainfall and a high water charge believe that water supply is a service and not a commodity. There must a subsidy element, a transfer payment or an equalisation payment.
The hon. Gentleman suggested that because much rain falls on Wales the supply of water for Wales must be less expensive. However, the hon. Gentleman forgets that rain falls where there are high mountains. The scattered nature of the population is one of the major factors in the higher cost of piped water supply. I know only too well that in my constituency, which has many small reservoirs, the Merioneth water board, subsequently the Welsh water authority, had the problem of piping and connecting the centres of water supply to provide a local water grid. Therefore, when the hon. Gentleman says that because water falls on Wales it should be cheaper there, he fails to understand the capital intensive nature of the water supply industry or service and the way in which the disciplines of a commercial capital intensive industry cannot be made to apply effectively or efficiently in Conservative Party market terms to the water supply industry. That is the basis of our argument against the thinking behind the legislation.
I do not wish to make myself an honorary member of the alliance, but I endorse almost everything that was said by the hon. Member for Isle of Wight (Mr. Ross) about the need to bring back the democratic process to this public utility. One significant theme in the debate so far has been the clamour for English regionalism from the Liberal Party, which has traditionally supported it, and from the Opposition Front Bench. That would resolve many of our

attempts to make the large public utilities, which must be organised at some level of their operation on a regional basis, directly accountable. As we look at the regional structure of the health authorities, water authorities and all the other utilities and the attempt to balance efficiency in administration and central funding with consumer control and local democratic control, we shall have to turn increasingly to regional authorities and more powerful local authorities that have a democratic basis.
As always, consumer committees are opportunities provided to advise after centralisation has taken place. That has been the familiar pattern since the 1960s in the creation of super Government Departments and super nationalised quangos or corporations. There is an opportunity for permitted participation when all the decisions have been taken. After centralisation, consumer committees are created, which are always small voices against the centralised decisions of the bureaucracy. That is why regional tiers of authority would go some way towards righting the balance between Whitehall and the English regions and in our case between the Welsh Office and the consumers of water or any other service in Wales.
Water services have obsessed my party for many generations. My constituency has one of the largest reservoirs in Wales. I take a personal interest in the resources that are transferred from it to the River Dee and hence to the North-West water authority area. The other major transfers from Wales are from the Elan Valley reservoirs in the area of the Welsh water authority to the Birmingham conurbation in the area of the Severn-Trent water authority, from the Vyrnwy reservoir, which is in Wales geographically but is in the Severn-Trent water authority area, to Liverpool, which is in the North-West water authority area, and from the Alwen reservoir on the borders of Merioneth, which is in the Welsh water authority area, to the North-West water authority area. Those are the four major transfers. The charge for those transfers is a major complaint by water consumers in Wales.
In the financial year 1981–82 the Welsh water authority had the highest average household bill for water supply. If one compares the present average payment in the Welsh water authority for this year with the water bill in the areas that receive water from Wales, one sees that the figure is over £79 in Wales, £59 in the North-West and £62 in the Severn-Trent area. In other words, the average payment in Wales is 32 per cent. higher than in the North-West.
That argument exercised the Select Committee on Welsh Affairs. The Committee's report has not yet been published. Its deliberations contain valuable evidence that will help to enliven our debate. Throughout the discussions of the Select Committee and the questioning of the various authorities, including water authorities from England, transfer pricing and the difference between the bills for comparable households in Severn-Trent, the North-West and Wales have been brought up by members of the Committee. My party is not represented on that Committee, but we gave evidence on the issue. We are following its deliberations closely.
Clause 8 removes entirely from the statute book one option that is being actively considered by the Select Committee.

Mr. Alec Jones: indicated assent.

Mr. Thomas: I am glad that the right hon. Member for Rhondda (Mr. Jones) endorses that. The Select Committee was considering that option as a result of the evidence. If it were for that reason alone I would oppose the Bill.
Although it was a limited measure, the Water Charges Equalisation Act began to transfer resources from one water authority to another. It has been made abundantly clear in Wales that full equalisation has substantial support. For example, the Wales TUC in its evidence to the Select Committee on 10 February this year stated that it had a policy of full equalisation between the water authorities in England and Wales so that consumers paying for water paid the same price.
The Government reject equalisation in clause 8. When I intervened in the Minister's speech he failed to tell me with what the Government intend to replace equalisation. Is the inequity of the 30 per cent. differential between Wales and the North-West to remain? Is it Conservative policy that consumers in Wales should be expected to pay 30 per cent. more for their water although 15 per cent. of the total water supply of the Severn-Trent water authority is obtained directly from Wales and more is abstracted by the North-West from rivers that are regulated by reservoirs in Wales? I hope that it will be made clear in the debate whether that is or is not Conservative Party policy, so that the voters in Wales will be able to pass judgment on it when the general election takes place.
If equalisation is rejected and if differential charges are permitted by the Government's policy, what is their view of the application made by the water authority, which takes a different view from them? The previously constituted and more democratic Welsh water authority and the present and more constricted authority have made two successive applications to the Severn-Trent and North-West authorities, the two recipient authorities of water from Wales, for a bulk transfer payment.
A submission was made to the Severn-Trent water authority and it and the North-West water authority disagreed. The issue was referred to the Welsh Office in October 1981. The Minister said that there would be a response shortly, but I remind him that his Department and the Welsh Office have told us that since February, when the Welsh water authority was approached by the Welsh Office with a document laying down the procedure for submitting further information and allowing time for consultation. It was then assumed that a decision would be made in May. However, no decision was made then and we expected a decision before the Summer Recess. Again, no decision was made. We are now told that the issue is before Ministers and that a decision will be made shortly. I should like to know how shortly is "shortly".
If the Government are turning down the option of allowing inter-authority bulk transfers to be charged for at a level above that charged to the North-West water authority or the Severn-Trent water authority as ordinary consumers of the Welsh water authority with only an abstraction charge to pay, and if the Government are not considering going beyond the no-profit and no-loss concept in inter-authority transfers, the Welsh electorate has a right to know. The implication of that policy is that consumers in England using water that has been abstracted in Wales and piped or abstracted outside through a regulating reservoir and a river will not be expected to bring about some equalisation of the 30 per cent. higher charge that is paid by Welsh consumers. They will have that advantage.
The then chairman of the Welsh water authority, Mr. Haydn Rees—I pay tribute to him for the helpful advice that he has given me—gave evidence to the Select Committee on Welsh Affairs. Mr. Haydn Rees is a major public figure in Wales who has served both local and central government in advisory capacities over the years. He knows the water industry and local government well. It is his considered view—this is the view which he presented in evidence to the Select Committee—that there is a need for the Government to address themselves to the difference between the way in which charges are made by water authorities and the basis upon which they are made by other public utilities.
When Mr. Haydn Rees appeared before the Select Committee he was asked by the hon. Member for Aberdare (Mr. Evans) on 25 February:
How can we argue that a telephone call from Birmingham is the same as a telephone call from Cardiff, or that a letter posted in London is the same as one posted in Powys and yet for some reason people have to pay a different charge for water in these different areas?".
Mr. Haydn Rees replied:
I believe that if you are to get rid of the emotion the only way is to treat it the same as gas and electricity… Thames, for instance, is a very wealthy Authority; it is 98 per cent. Self-financing and I believe it had surplus property sales last year of £95 million when we have been lucky to have sold just over £1 million of assets in three years.
He was saying that the Welsh water authority and the Thames water authority are different because of the populations that they serve, their historic debts and the water arrangements that they inherited. He went on to argue in his evidence for standard charging throughout England and Wales. That is the view of someone who has worked in local government as a chief executive and more recently as the chairman of a water authority. It is a view to which the Government should listen.

Mr. Anderson: Does the hon. Gentleman follow the consequence of that argument? If there were equality throughout Britain, there would be little or no scope for the Welsh water authority and it would be nationalised on a United Kingdom or England and Wales basis.

Mr. Thomas: I should like to enter into a long debate with the hon. Gentleman about the nature of the structure of public corporations in Britain of a federal or centralised nature. However, I do not think that equalisation is the only model for transfer payments. There are other models, and I shall outline them. It is interesting that the chairman of an authority should argue for pricing. I do not believe that regulated or standard charges should result in the removal of a democratically elected regional authority. Gas and electricity provide the same example. Although the pricing is uniform, or within a 20 per cent. margin of uniformity, we still have area boards that can administer the services locally. That brings in a democratic element. Surely standard charging should not lead to abolition.

The Under-Secretary of State for Wales (Mr. Wyn Roberts): I may be able to help the hon. Gentleman on how shortly is "shortly". The question turns on the determination by my right hon. Friends of the issue of bulk transfer charging. There has been some delay because we have had two authorities in Wales alone making different submissions. The English authorities have had to comment and have had to have time to do so. We hope to have a determination which can be taken into account by the Welsh water authority in determining next year's prices.


I think that the hon. Gentleman is making too much of bulk transfer charging, bearing in mind the price that has been paid by the North-West and the Severn-Trent authorities in the past in relation to the running costs of the Welsh water authority, which in the current year amount to £154 million.

Mr. Thomas: I am aware of the running costs of the Welsh water authority. I referred to them at the beginning of my remarks when talking about the cost of supply in geographically difficult areas. We must take account also of the way in which the Welsh water authority has been saddled with an especially large historic debt, which has penalised it in its annual pricing function. However, I accept the hon. Gentleman's argument about additional costs.
I am not arguing that bulk transfer charging is the only way of producing equity. I am arguing for the options to which the Government are laying themselves open. As the Bill rejects equalisation, the only options open to the Minister are bulk transfer charging or local government, and therefore rate support grant, funding of the water service. Those are the alternative ways of providing differential funding. They would provide means of funding the differential or subsidising it to a degree in Wales and receiving areas. Bulk transfer charging appears inequitable to consumers of water in Wales who have to pay higher charges because they see regulating reservoirs within their localities having their water abstracted and used outside.
The Severn-Trent water authority gave evidence to the Select Committee in December 1981. As one would expect, the authority, in its evidence to the Select Committee on 16 December, objected to the possibilities of a transfer pricing scheme and a bulk transfer scheme on the grounds that this would result, in the bill given to Severn-Trent by the Welsh water authority, in an increased charge of £2·668 million per annum or 2·3 per cent. of the average charge to the water supply customers. Severn-Trent argued that such an approach—the level of charge requested by the Welsh water authority for the bulk transfer—conflicted with the generally applied no-profit, no-loss basis of inter-authority bulk water supply transfers which received specific Government approval in paragraph 57 of the 1977 White Paper, "The Water Industry in England and Wales: the Next Steps".
The Severn-Trent water authority argued:
The effect of the WWA proposal would be to charge to STWA, and also the North-West WA … a rate considerably higher than that which the WWA will charge to its own water supply customers in respect of abstraction costs. If this proposal were to be accepted the existing generally accepted 'no profit no loss' basis for inter-authority bulk transfers would no longer be seen within the water industry as the guiding rule and the precedent set could not be restricted to the present case. In the longer run experience in other parts of the world and in England and Wales prior to the 1974 reorganisation suggests strongly that this would lead to uneconomic use of resources as a whole.
That is the case presented by the Severn-Trent water authority.
When the Minister winds up I would like him to tell me what his proposals now are, as he has clearly rejected the Labour Government's equalisation proposals, if he is not to allow for a bulk transfer payment sufficient to equalise the 30 per cent. differential between prices charged in the North-West and Severn-Trent areas and in Wales. In this

context, it is useful to consider the other two options which the Government, according to their political position, might reject.
As Ministers have already said, if the Government create 10 autonomous or quasi-autonomous water authorities, and if those authorities regard water as a commodity saleable both to their own consumers and to other authorities, it might well be argued—on the basis of the market mechanism which, according to the Conservative Party, apparently determines the whole of civilised existence—that the authorities should be free to charge a commercial rate. In my view, that would lead to chaos in the organisation of the water industry in England and Wales.
Plaid Cymru has never argued for an exorbitant rate to be charged for water abstracted. We have argued for a fair return—25p per 1,000 gallons—as we said in our evidence to the Select Committee. Our concern has been to break down or reduce the differential between the amount paid by consumers inside and outside Wales, and also to ensure that the areas of abstraction were compensated for the economic resource abstracted.
For example, one could imagine a payment to an economic development fund administered by Mid-Wales Development for the area that I represent. There should be some recompense to pay for the amenity development or even the conservation of some of the areas from which these resources are abstracted. That has been our argument. We have certainly not argued for transfers to be determined by commercial market forces. If the Government reject equalisation, however, given their view of the water industry as a business and water as a commodity, theoretically the Welsh water authority could charge the Severn-Trent or the North-West authority whatever it liked, on the basis that it was a fair commercial transaction.
Will the Conservatives state clearly what kind of transfer mechanism they wish to apply, if it is not to be a commercial rate laid down by one authority against another? Other options include wiping out the inherited debt—the historic costs of the authority. I understand that that would make a substantial contribution, as the shortfall for the current financial year is about £8 million. If equalisation is rejected, there is also the possibility of a local authority mode of support through the rate support grant, as applies in Scotland.
I shall not go into the details, but the reorganisation of the Scottish water industry in 1975 did not take place along the same lines as the reorganisation in England and Wales. Both the organisation of the industry and its funding arrangements are very different. Public water supplies are funded through the domestic water rate, but the services are located not in a centralised authority but in the regional or island authority and their funding is part of the general rate. The general rate, of course, is subject to rate support grant, although there is a mechanism to try to ensure that the rate support grant element is not directed specifically towards water service deficits. In other words, there is no hypothecation of the rate support grant element.
A significant aspect of the Scottish system and one that has caused much concern in Wales is that, although rate rebates in Scotland are not generally applied to the domestic water rate element, they are so applied in the case of disabled persons. In 1980–81, the estimated total rate rebate paid in Scotland was £52·15 million, of which £1·04 million was attributable to that part of the regional


or island areas where the general rate is raised in respect of water charges. Additionally, an estimated £350,000 was paid in rebates to disabled persons in respect of domestic water rates, the total rebate to the disabled being £5·87 million.
Organisations representing the disabled in Wales, and certainly my hon. Friend the Member for Caernarvon (Mr. Wigley) who conducted a long campaign on this, and indeed introduced a Bill last Session to deal with the matter, regard it as iniquitous that water rates should be rebatable for the disabled in Scotland but not in Wales. If the Government take the view that the water authorities in Wales should charge the present higher rate to their consumers, consumers on low incomes and disabled consumers should be able to obtain rebates. This is a matter of grave concern among organisations representing the disabled.
The Conservative Party has clearly forgotten that the water service in Wales is not a new area of controversy. Historically, it is a matter of controversy because of the way in which the reservoirs were constructed. As the Minister will know, on the shores of the reservoir in my constituency there is a chapel of the Presbyterian Church of Wales—a denomination that the Minister and I know well—dedicated to the memory of the village of Capel Celyn which, with the consent of the House but with the opposition of nearly all Welsh Members at the time, was drowned to provide the reservoir. An historic sense of injustice is felt strongly in Wales, and not only about that reservoir.
The Daniel committee was set up as a result of the demand for justice, and it reported to the Labour Government. It considered in great detail all the options available, including total equalisation. Its recommendations resulted in partial equalisation under the Labour Government. It considered extending the rate support grant to offset higher water costs. It investigated the notion of a direct Exchequer subsidy and also the imposition of surcharges, in addition to the existing abstraction charge, as surcharges imposed on water transferred to other authorities.
The report proves that we cannot return to the period before 1975, when water charges were determined by each authority according to the cost of supply in its area. We cannot fall back on the no profit, no loss notion. Indeed, no less a person than the Under-Secretary of State for Wales told the Standing Committee on the Water Charges Equalisation Bill on 24 February 1977:
What I propose in the amendments is that there should be a more commercial pricing of water transfers … I suggest that the price should be enough to ensure that the average price of water to Welsh consumers is no different from the average price of water to consumers in Severn-Trent and the North-West.
He added that
water is a scarce resource. Why should the areas that have it in abundance, and have very little else in abundance … not regard water as a saleable commodity."—[Official Report, Standing Committee B, 24 February 1977; c. 393–5.]
Is that still the Minister's view?
My final quotation comes from Haydn Rees. He argued a powerful case in his last chairman's foreword to the Welsh water authority annual report, He said:
As I have publicly stated on several occasions, whatever decision is reached, I personally believe that sooner or later (and the sooner the better) our legislators will have to realise that the Water Services Industry is the only important public utility

service that does not have either a common base charge or an equalisation of charges. That this, the most important civilised and civilizing of all the public services, should not have similar treatment is, I believe, unacceptable and inequitable to the people in the area we serve.
This Bill makes far smaller the possibility of equality between the parts of Wales that transfer water and those which received it.
Gas has a common charging base, with few variations. Electricity has a common charge for the cost of energy from the CEGB, which accounts for 80 per cent. of the bill; depreciation and rates take a further 10 per cent. and operating costs the remaining 10 per cent. Therefore, there is a slight variation. Posts and telephones have always been charged on a uniform basis. The Bill is an attempt to prevent the Welsh people in the areas where water is conserved, and from which it is transferred, from obtaining some justice. Because of that, many people have withheld payment of their bills this year. When the Minister replies, I hope that he will say clearly that there will be a response from the Government which will enable the areas to be recompensed. The Bill results only in a further attempt to create greater inequity and inequality between the areas. It also perpetuates the notion that water is a commodity, not a public service.

Mr. Charles Morrison: Long ago I was taught that it was never wise to take a good political argument to a logical conclusion. I admit that I am not wholly convinced that the hon. Member for Merioneth (Mr. Thomas) has a good argument. Perhaps that is why he took it to a conclusion. He went into a great deal of technical detail, but the burden of his argument was twofold. First, he supported the retention of the Water Charges Equalisation Act. I must tell him that the Act has not been used since 1979, when the Government made a commitment to abolish it. I am delighted that they are now doing so.
The hon. Gentleman, following the hon. Member for Isle of Wight (Mr. Ross), made an eloquent plea for democracy. I agree with his support of democracy, but I am not convinced that it is necessarily the best way to manage a public utility such as water.
The right hon. Member for Birmingham, Small Heath (Mr. Howell) said that the Bill was dangerous and damaging. I could not help feeling that that was a slight exaggeration— even a wet could not become so overexcited about the subject of water—

Mr. Denis Howell: Wait until there is a national crisis.

Mr. Morrison: I have long lost my Utopian enthusiasm for reorganisation of any aspect of national life. Like my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths), I have lived through the reorganisation of local government, and I am not convinced that that was quite perfect. I have also lived through two reorganisations of the National Health Service; the first was so bad that we had to do it again, and I am not convinced that we got that right. I have lived also through the reorganisation of water—I think more than once, but I am not sure. No doubt I have lived through other reorganisations that are better forgotten. But on no occasion has reorganisation been found to be a total success. On no occasion would many members of the public consider that they were better off following


reorganisation. To be fair, what went before might soon have deteriorated into an administrative muddle at much greater expense and with less and less satisfaction to the consumer.
I have reached the stage when I look at any reorganisation through jaundiced and sceptical eyes. That stated, I must declare an interest as a vice-president of the Association of County Councils, the Association of District Councils and the National Association of Local Councils. However, I disagree with the local government associations on this occasion. I understand their concern about local democracy. Over the years I have fought for their rights—

Mr. King: Hear, hear.

Mr. Morrison: I thank my right hon. Friend. My remarks have sunk in. I have fought for their rights and the maintenance of local autonomy against the trespasses of Whitehall and Westminster. Local government provides one of the all too few remaining checks and balances within our constitution. I shall continue to fight for local government on that basis. I hope that my right hon. Friend takes note of that.
After lengthy consideration I am no longer convinced that water and those for whom it is provided benefit automatically from the intervention of local democracy or any other democracy. Indeed, I suspect that the opposite is true. Water is just the type of commodity that can be dealt with best by a public utility type of organisation. It is not so different in principle, as my hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) said, from gas and electricity.

Mr. Ogden: They may all be nationalised or part-nationalised. Gas, electricity, oil and coal are all alternative forms of fuel—apart, that is, from the fuel used for lighting. However, there is seldom an alternative supply of water to the nationalised or local authority one.

Mr. Morrison: I do not quite follow the logic of the hon. Gentleman's argument. Water is a resource that must be harboured and cared for, for a multiplicity of purposes. There is a consumer product to provide and waste that must be reclaimed, recycled and renewed. Those objectives are more likely to be achieved by good management and a sound management structure than by overt democracy. The Association of District Councils claimed in a letter to its vice-presidents that
local government membership gives the essential element of local accountability. This is a major factor in holding down water charges.
Is it? I have received more letters of protest about water charges than about almost anything else. I doubt that I am unique in that. I do not believe that many consumers would support the association's contention, much as I should like to be able to agree with it.
My hon. Friend the Member for Reading, North (Mr. Durant) pointed out that often—indeed, almost invariably—local authority members of water authorities are not personally known to be members of those authorities.
There are two other points about local government representation. First, the work, if not the scope, of local government is now onerous and for many senior councillors it has become more of a full-time job than a voluntary task. As a consequence, therefore, it is likely to become increasingly difficult to find able councillors who

can spend extra time on water authority work. Secondly, I am not convinced that accountability and efficiency are automatically improved by local authority representation. I fear that councillors, once appointed to a water authority, often become ambivalent and uncertain whether to be loyal to the local authority, the water authority or to the consumer.
A clear-cut division between a smaller water authority board and the consumer, whether individual, industrial, commercial, agricultural or even local government, is more likely to create a climate in which successes or failures, efficiency or inefficiency, can be highlighted and, where necessary, acted upon. I therefore welcome the Government's proposals. They will reduce bureaucratic costs and provide a more efficient structure for the supply and conservation of water.
I am glad to note clause 2. I think that my right hon. Friend said that he hoped that clause 2 was not controversial. He could have been much more positive and enthusiastic. An increase in the limit on aggregate borrowing from £5,000 million to £6,000 million must be sensible in the face of inflation, although its rate has been much reduced. In present economic circumstances, I hope that clause 2 means that water authorities are to be encouraged to invest in, for example, sewers or other improvements that consumers need and thereby create more jobs for the construction industry. I also hope that my right hon. Friend the Secretary of State will not shrink from increasing the limit of borrowings to £7,500 million whenever it is necessary to maintain improvements and construction programmes.
I shall not dwell on the abolition of the National Water Council and the Water Space Amenity Commission. I have no doubt that both have done good jobs but that their usefulness is now outlived and that it is time for them to be put to sleep quietly, albeit with thanks to those who have served on them. Clause 7 should reduce the fear that some people have about the lack of expression of consumer interests.
It is useful legislation. It is not earth-shattering but it is sensible and in the fullness of time it will be of benefit to consumers and other users of water. I therefore wish it well.

Mr. Eric Ogden: The hon. Member for Devizes (Mr. Morrison) said that he did not believe that democracy or a democratic process was necessarily the best way to control and operate water authorities. He gave insufficient credit to the simple fact that it was only because of democratically elected local authorities that the supply of pure water began. Occasionally, a philanthropist or business man, such as Lord Myddleton, made a New River to bring water into London. But such men were rare. The provision of the type of water that both he and I want supplied to British citizens was chiefly brought about by, and is to the credit of, local democracy. I agree with him about the extent of that responsibility going too much in one way or another. I also agree with the hon. Gentleman's scepticism about the ability of successive Governments, especially Conservative ones, to organise or reorganise anything effectively.
Today's debate is one occasion when I could be tempted to speak for longer than is my usual wont. This is partly because other hon. Members have shown a fair


interest in the matter and partly because of my simple conviction that the Committee that considers the Bill could be rid of the dominance of the Chief Whip, the Secretary of State for the Environment and the Minister for Local Government and Environmental Services. If its proceedings went ahead with the good sense of the Under-Secretary of State for the Environment and the knowledge and sensibility of the Under-Secretary of State, Welsh Office, and if the malign influence of Government Whips were removed, there might be enough common sense in that Committee to achieve a practical improvement in the present circumstances without going for the wholesale massacre that is proposed in the Bill.
The hon. Members for Devizes and for Bury St. Edmunds (Mr. Griffiths) made it clear that they have little faith in the ability of Conservative Governments to organise or reorganise anything successfully. One has only to mention local government and the National Health Service. There is nothing in the Conservative record to suggest that this Bill will improve the quality of water, lessen the cost or make the industry more accountable. For that reason, hon. Members should view the Bill with the same doubts brought to the issue by at least two Conservative Members.
To be more than generous to the sponsors of the Bill, the title of the Bill is at least properly modest and accurate. It should cause no confusion. I am not certain from the procedures of the House that have been followed tonight whether this is a 100 per cent. English-Welsh Water Bill. I agreed very much with the comments of the hon. Member for Central Ayrshire (Mr. Lambie) on training. I hope, Mr. Deputy Speaker, that the precedent set before you came into the Chair, whereby the first Opposition Back Bencher to be called on a Bill concerned almost 99·9 per cent. with English and Welsh affairs was an hon. Member representing a Scottish constituency means that next time a Bill that is almost 99·9 per cent. Scottish, comes before the house an Englishman or a Welshman will be called before a Scots Member. I would not like to be the person involved but this is, I think, a point worth making.
The Bill may be an attempt to change a water supply service to a water supply, use and re-use industry. The intention might be right and the principle worthy of support. But the Bill will not deserve support now or later unless it is considerably amended. In its present form the Bill has too many faults. The Minister might have been a Foreign Office Minister introducing the Bill. His performance was, in fact, better than that of most Foreign Office Ministers such was his selective approach to the history of the proceedings that led to the Water Act 1973. Even the hon. Member for Bury St. Edmunds revealed more than the Minister.
It is no State secret—if it was a State secret under this Government it would be even better known—that the 1973 Act was a major compromise. That act resulted from some fantastic rows at the time involving the Department of the Environment, the Ministry of Agriculture, Fisheries and Food and the Welsh Office. There was fury and furore all over the place. It was a very lively occasion. At the time, the Welsh Office and the Ministry of Agriculture, Fisheries and Food seemed to have held their own. It was about 6–4 in favour of the Department of the Environment. The Bill was a compromise.
Now the Department of the Environment comes along with a new Bill, having made major concessions, especially to the Ministry of Agriculture, Fisheries and Food. It is piquant that the then Secretary of State for the Environment, who is now the Minister of Agriculture, Fisheries and Food, will receive what he originally planned that a different Minister of Agriculture would have. That is for the Ministers to sort out.
My complaint is that this Bill brings too great a swing of the pendulum. This should be called the Government Centralisation and Ministerial Control of the Water Industry Bill. If hon. Members above the Opposition Gangway want a classic example of how to nationalise without bringing in nationalisation, it is before them in the Bill. The control of the English and Welsh water industry will rest in Marsham Street, with the Secretary of State and his Ministers. They will have the power to appoint and to dismiss. They will have control of the supply and of the consumer representation interests. The power will reside with them whether they say they want it or not. There will be no independence for the water authorities. Ministers talk of greater independence for the water authorities and greater opportunities for them to manage their own affairs. The Government are offering the water authorities shadows. The substance is entirely under the control of Ministers.
In the North-West and especially in Merseyside, the record of the water authorities, established by the 1973 Act, has been, in most regards, good to very good, marred occasionally by some spectacular disasters in a particular area at a particular time. Overall, however, the record is good. This is almost a monopoly service. There is a difference between the supply of water and the supply of gas, coal or electricity where there are alternative sources available. In my house there is no alternative to the water authority supply.

Mr. Lennox-Boyd: Has the hon. Gentleman recently tried to power an electric light with gas?

Mr. Ogden: In one room there is still a gas mantle in the corner.

Mr. Lennox-Boyd: I am trying to show the hon. Gentleman that electricity is a monopoly for lighting in the same way that water is a monopoly.

Mr. Ogden: I will grant the hon. Gentleman a halfway house on lighting but not on heating. Water is almost a monopoly service subject to Government diktat, and not directly responsible to any elector or consumer. I recall that the hon. Member for Ormskirk (Mr. Kilroy-Silk) was at one time always asking why the North-West water authority had bought a large car with the registration NW 1. It is an obvious public target.

Mr. Andrew F. Bennett: Is it not sad that the North-West water authority committed a series of public acts in its first years of existence that created the impression among a large number of people that it was spending money like confetti?

Mr. Ogden: The hon. Member for Stockport, North (Mr. Bennett) had a great deal to do with encouraging that wholly wrong impression of the water authority's activities. It was right that there should be criticism of one part of the authority's activities. To say that the whole organisation was at fault amounted to a difference of emphasis which the hon. Gentleman should have known


better than to pursue. I have criticised aspects of the authority's work on occasions. Overall, the record has been good.
We are fortunate in the North-West and on Merseyside in the purity and quality of the product. Export to the London area should be encouraged. Hon. Members representing Wales, the North-East and constituencies east of the Pennines will no doubt say the same about the quality of their water. Ours is the best. It is only when we have to come and work in London that we realise how good is the product at home. There is no reason to believe that the extent of Government control proposed in the Bill will improve the quality of the product, the price or the influence that can be brought to bear on water authorities. At least those in the North-West listen to what we have to say.
The hon. Member for Newcastle upon Tyne, North (Sir W. Elliott) introduced what I would call the Sherlock Holmes factor—the dog that did not bark. I refer to a subject that the Minister did not mention. What is to happen to the private sector of the water supply industry or service? Some mention could have been made by the Minister of the relationship that should exist between the new water authorities operating under the Bill as it now stands and the private water supply authorities. There are reports that they have been asked not to make a fuss this time, but to leave everything quiet so that after the next election, if the Conservatives are successful, there will be something for each of them. I do not believe or disbelieve the reports, but it would be reasonable for the Minister to tell us what his proposals are about the private sector and how it will work and co-operate in the new arrangements. As the Minister did not mention this, I have some suspicions about his intentions.

Mr. King: I did not mention it because there is no change. As the hon. Gentleman knows, the private sector is already an important and significant element which provides about one-quarter of all fresh water. There are 28 statutory water undertakings and we do not propose any change in their relationship. The statutory duties of the water authorities remain as they are.

Mr. Ogden: I am grateful that the right hon. Gentleman has put that on the record. We are agreed that the relationship between the new authorities and the private sector should continue to be at least as good as they apparently were between the old and the new water authorities, and that the Minister has no proposals at this stage for any changes in that relationship. However, he would have been well advised to say so.
The Bill is a nationalisation measure. At the moment there is some local influence and accountability, which may be too much, too wide and too diverse. Under the Bill, the Secretary of State will appoint members who are to have some regard for their local areas and some knowledge of the water supply industry or services. The Minister will have regard to the information, knowledge and experience and will have the power to appoint two members who will have responsibilities for agriculture, fisheries and drainage. The Secretary of State will supply them, and that is the division. On those figures of 6:12 the ratio between the Departments of the Environment and Agriculture, Fisheries and Food will be 7:2 or up to 13:2.
The Minister said that executive members of a water authority would be full members of the water authority.

Does this mean that the chief executive will also be an appointed member of the water authority? Will he draw two salaries? Will he be a full-time executive and a part-time member of the water authority? How is that fitted into one working week? Will the treasurer or the chief surveyor be a full-time fully-paid member of the water authority, and a part-time, part-paid member of the executive? This is interesting. I am asking for clarification.
There is a case for the chief officer of any authority to have real influence with his authority, whether local government or anything else, but the Minister will find conflict arising if it said that one can be a chief officer and a member of the authority at one and the same time.

Mr. Dickens: Why is the hon. Member making such heavy weather of a small point? It is exactly the same as Ministers, who have an ordinary parliamentary salary and a ministerial salary, which they richly earn for the hours that they put in.

Mr. Ogden: No, they do not.

Mr. Dickens: Do they not? Well, they ought to.

Mr. Ogden: I am tempted to leave it at that. Help of that kind from the Back Benches is something that the Minister could gladly do without. The Minister is not employed by anyone. He is a self-employed person, as we all are. Chief executives are employees. How can one be a master and employer, and a paid servant at the same time? Ministers—I wish they would think of this more often—are not paid employees of anyone. They are self-employed, and there is no comparison.

Mr. King: The hon. Gentleman is making heavy weather, although perhaps not in the way suggested This would be more like a board, whether a gas or electricity board, in which there is a chief executive. One does not say about a private sector company that it is strange that the managing director is on the board, and ask how he fulfils those functions. It happens to follow from the function of his responsibility. I am not saying, and I made this clear, that we necessarily see a role for executive members. There will be discussion in Committee about whether they would, automatically and ex officio, because of the position that they hold, be on the authority, and about who might be executive members on the authority. These are matters that we shall consider, but I hope that the hon. Gentleman recognises that this is not an appalling conflict or a frightful problem about a man doing two jobs. This is the way that the whole of the private sector operates.

Mr. Ogden: That is a point that we shall want to examine. I see the problem about a paid professional person such as a surveyor or an engineer on an authority also being on the board of directors. The duty of the one is to provide policy and the duty of the other is to put the policy into effect. The balance must be right.
Between now and the Committee stage, which might come in two weeks' time, the right hon. Gentleman could look at the possibilities of finding some way, perhaps more modest than the Labour Party would want, of having a local area voice on the authority, whether through the county or the city council. Some people must go on to a smaller authority, which will be accountable, indirectly, to the electors of the area. The number might be modest, but there would be a degree of accountability. Under the


proposals in this Bill, the appointees, of one kind or another, will only be accountable to the Secretary of State in Westminster. I do not want that.
The Minister might argue that if we do not agree with the borrowing limit, the industry will be in trouble. The simple answer to that is that if we do not give the Bill a Second Reading tonight, he can bring in a simple one-clause Bill next week. He will then have his borrowing without opposition. The argument about urgency is not supported by that.
When we were talking about the dissolution of the water council, I became as lost between "TISWAS" and "WACO"s as I did in the Welsh hills when the hon. Member for Merioneth (Mr. Thomas) was speaking. I listened with great care to what the hon. Member had to say, but I wish that he had fed it to me in smaller buckets.
I object to the abolition of the water councils in that the Minister is saying that the Secretary of State will hold all the assets and can dispose of them to somebody else if he wishes to, and in whichever form he wishes. If the operations cost the Secretary of State anything—for the dissolutions—he can charge the local water authorities. This is a dissolution edict. Henry VIII would have had much to learn from this Secretary of State. That king may have dissolved the monasteries but he did not charge them as well as taking their assets.
I welcome the parts of the Bill dealing with training and overseas activities. However, how will the Minister achieve any co-ordination between the different authorities and prevent the mistake of having a multiplicity of smaller authorities each trying to do on a small scale what ought to be done regionally or nationally?
I should like more information on the water authorities and local authorities as described in clauses 6 and 8.
The Bill does too much. It concentrates too much control in the centre with the Secretary of State for the Environment, because the Secretaries of State for Agriculture, Fisheries and Food and Wales will be very much numbers two and three in this kind of organisation. The Bill could be subtitled "The Department of the Environment Strikes Back", "The Empire Returns", "Heseltine's Revenge" or something like that. It does not increase the real powers of suppliers and consumers in water authority areas. It is not essential that its provisions be controlled from the centre. The Minister will control the appointments, the authorities and even how the consumer interests will be represented and organised. Both aspects cannot be combined in a central organisation.
The Bill goes too far, too fast. The pendulum swings too far. I shall vote against it, and I hope that other hon. Members will do so as well. It may be that some independent spirits on the Conservative Benches with some knowledge of the industry will be prepared to say "No". Change is needed, but not this change in this form.

Mr. Mark Lennox-Boyd: I am happy to speak after the hon. Member for Liverpool, West Derby (Mr. Ogden), in whose speech I intervened. The assertion that the water authorities are a unique monopoly, thereby justifying the election of representatives, does not stand up to analysis. There are many public and private monopolies on which the consumer has no elected representative. For example, we have never

considered the possibility of elections to the body responsible for the sending of a message by mail, yet it is directly comparable.
We have all played the famous game of "Monopoly". As well as four railway stations, that game also has an electricity company, a gas company and a water works. All those companies are utilities, and the game of "Monopoly" and common sense are a good precedent for establishing and asserting the fact that water is a utility.

Mr. Andrew F. Bennett: When the hon. Gentleman played "Monopoly", did he go for the water undertaking? I suspect that he went for Park Lane. Many of us fear that, given the way in which the Government and the water authorities are behaving, the water authority will soon be the best part of the "Monopoly" board.

Mr. Lennox-Boyd: I am grateful to the hon. Gentleman for that intervention. It would undoubtedly enliven the debate if I went down that path, but enjoyable though it would be I must stay in order.
The right hon. Member for Birmingham, Small Heath (Mr. Howell) displayed considerable indignation which has not been matched by the attendance of his supporters. Indeed, only one Labour Back Bencher has contributed to the debate. Perhaps Labour Members accept, as my right hon. Friend said at the outset, that this is not the most newsworthy of measures.
I welcome the Bill because it seeks to improve the relationship of the public, both as taxpayer and sometimes as an aggrieved party, with the water authorities. My area comes under the jurisdiction of the North-West water authority, and I should like to comment on its view of the Bill.
That authority has not agreed with many of the things proposed by the Government, and I should like to demonstrate why I believe that it is wrong in this instance. As my right hon. Friend said, the Water Act 1973 moved away from local authority involvement, whereas previously local authority involvement included elected representation for consumers. Over the last decade, great tensions have resulted.
In its annual report, the North-West water authority considers itself to be a consumer council, but experience has not borne that out. The area of the North-West water authority stretches from south of Crewe to north of Carlisle. It has 32 members—not as many as the 61 members of the Thames water authority. Under internal reorganisation plans, it is proposed to reduce the eight divisions to four. The authority is opposed to the creation of smaller boards and local advisory committees.
I appreciate that worthy people serve on the board, some of whom are known to me personally, but I believe that their opposition to these proposals, while genuinely felt, demonstrates that they do not appreciate the remoteness in which they are held by the public.
It is absurd to suggest that the 32 members of the North-West water authority should be considered as a consumer council, because inevitably a conflict of interest is involved. By using the phrase "conflict of interest", some hon. Members may think that I am suggesting that something improper is taking place. That is not so. There is no question of abuses taking place. However, if a member of an organisation is also responsible for representing complaints to it, he will find it impossible to do justice to both sides. That is what a conflict of interests


is all about. Such members cannot be expected to speak properly for the consumer, even when they try to do so. It is necessary to have bodies that are unafraid of being critical. That is what consumer councils are all about.
How can the North-West water authority be a consumer body? The coverage would be ridiculously thin, because the 32 members, many of whom are professional experts, would represent 6£8 million people. To whom would an aggrieved consumer turn? Both the Cumbria county council and Lancashire county council have one appointee on the authority. Cumbria district council also has one appointee and Lancashire district council has two.

Mr. Denis Howell: Better than none.

Mr. Lennox-Boyd: The right hon. Gentleman says "Better than none", but better the consumer councils than this set-up. That is my assertion.
The right hon. Gentleman complained earlier about the way in which Ministers tend to re-appoint their political placemen. I remind him that since the council elections last year, all seven county councils on the North-West water authority have placed new appointees on that authority. That cannot be right, and we must ensure that it does not happen. That is why we must treat the water authorities as utilities. Following a change of Government, we do not do stupid things such as changing the constitution of the CEGB. We respect the expertise that professionals bring to a particular job.
I should like to see a local consumer council to which I could direct my constituents' grievances. The hon. Member for Isle of Wight (Mr. Ross) criticised the effectiveness of consumer councils and the North-West water authority seeks to do the same when it says that in its opinion consumer consultative committees of nationalised industries do not appear to be held in high esteem by the public. That is a rather patronising way to put it. Consumer councils should be angry and frustrated bodies. On many occasions they will fail to get their views across. Back Bench Members fail often to get their views across and are frustrated, but it is surprising and welcome when occasionally we succeed.
In the North-West, consumer councils could be beneficial to the water authorities. We need to explain to the public the terrible problems of sewer dereliction, the need to rebuild, and the immense cost that that must legitimately place for several years on the water rate. The public has not been made properly aware of those facts. The committees will have a double reason for existing.
The proposal is that the local consumer councils will deal with each of the districts of the water authority. The North-West water authority will reduce its districts from eight to four. In the North-West there will therefore be three dual purpose districts only, one of which will be fisheries. My constituency will be within the combined Northern and Ribble district which includes the whole of Cumbria and North Lancashire north of Chorley. It is a gigantic area and I do not believe that a consumer council can do justice if it has to cover such a large area. It will suffer from the appalling problem with which we have to live in Cumbria, that it takes hours to get anywhere. Perhaps the Secretary of State will consider it wise to make some modification.

Mr. Campbell-Savours: Is the hon. Gentleman worried that under the new reorganised arrangements the

rivers division and the bailiff service in Cumbria will suffer? Will he seek assurances from the Government that that will not happen?

Mr. Lennox-Boyd: I shall seek assurances if I should. I am not particularly worried about that, although I believe I know the point to which the hon. Gentleman is referring. I do not see how the Bill will affect the problem to which he has referred as it will not affect the constitution of the North-West water authority. The problem could well be helped if there is a consultative committee to take up the cases to which I believe he is referring.
There is a great fear that a Government might become the sort of body that will make extremist political appointments. That fear has been genuinely expressed by many people. The hon. Member for Liverpool, West Derby (Mr. Ogden) said that one day there could be an extreme Government who would appoint their political supporters. If we treat these bodies as utilities that should not be a cause for great alarm.
Clause 1(5) provides that appointees of the Secretary of State shall be persons who appear to him to have had experience and shown capacity in some matter relevant to the functions of water authorities. Does that give some general classification and protection? I appreciate that it is only what "appears" to the Secretary of State. I am glad to see the Under-Secretary nodding. Someone who has had no experience of the industry could not possibly be appointed. That appointment could be subject to legal challenge which would provide some protection against the provision of jobs for political appointees.
People who wish to sue Governments are often faced with the problem of whether they have the locus standi to bring an action. The Under-Secretary might consider whether consumer councils could watch that aspect of the matter, although I do not see him smiling with great joy at that suggestion. Will he clarify what right the public has to challenge a Government seeking to make flagrantly political appointments?

Mr. Andrew F. Bennett: I have listened carefully to what the hon. Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) said. I believe that he made a major error in comparing the lack of representation under the new Bill with the position as it was before. Most people who argue in favour of democracy do not feel that the present position is satisfactory. It is the worst of all worlds. If we want local democracy we have to look further back.
At a result of three pieces of legislation we have created a quango that is entitled to raise money from the public, but which is not accountable to the public. The principle of no taxation without representation is being stood on its head. The Government have set up a quango in three steps. I do not know whether the word for creating quangos is "quangoisation". The blame has to be laid at the door of the House, because it started to create water authorities in the 1960s. Until that time, water authorities had been developing for almost 100 years. They were based on local authorities or consortiums of local authorities. In some parts of the country there were water companies. It was a good system on the whole.
There were many complaints in the early 1960s about the problems of collecting water, but there were few complaints from consumers about services in their areas,


because they were able to contact local councillors and complain. In many areas, people knew the water manager. There was a local personal service.
The problem was that too many people said that the collection of water should be looked at nationally or on a larger scale. I accept that, but I believe that we should have separated collection from distribution. In the electricity industry there is the Central Electricity Generating Board and the distribution boards. In the 1960s there were strong arguments for saying that water collection needed to be managed nationally but that water distribution should still be a local service. It could have been left with the local authorities.
In the 1960s we made local authorities come together in consortiums. That did not work well, but, just as the system was beginning to settle down, in the 1973 Act we went for river catchment areas, which in the North-West was distorted, as Manchester was already collecting from the Lake District. We lumped together a series of river basins to make the monstrous area of the North-West water authority. We are now making things even worse. My electorate can get hold of no one even to listen to their problems. The water authority is remote and distant and people are disillusioned.
There is no mechanism for people to choose the quality of their water authority. The judgment must be made either to have a super-efficient authority with super-high prices or something more moderate. Before the 1967 reorganisation the old councils made the choice. There were good authorities with relatively high charges and bad ones with low charges. One reason why charges escalated in the 1970s was that the people who had opted over the years for a fairly poor service and modest charges found that the new council was asked to make high charges and demanded that the neglect in the area was put right and that the super-service that some towns had should be provided. Who will make the judgment now? Who is to decide whether to go for professional excellence and what the price should be? The consumer should have a voice in that.
The Government should set up a national body for water collection and sewage disposal but return to local government the distribution of water and the collection of sewage, as that could be run on a local basis and be made firmly accountable to the democratically elected councils.

Mr. Denis Howell: After our review we published a White Paper and our conclusion was the same as my hon. Friend's—that one national authority should provide water to the local authorities which would contract for it; the local authorities would clean it up and put it back into the system again.

Mr. Bennett: I believe that that is the way in which we could return the industry to democratic control.
There is also a problem with appointees. The Minister gives little authority to his appointees. Much greater authority comes from being elected, first by the electorate and then by fellow councillors as chairman of the committee. That attracts far more respect. If the appointee does a good job in criticising the Government and campaigning against them, they will sack him; if he presses for the authority to become more efficient, recommendations may be made to the Minister to get rid of the individual, suggesting that he does not do a good

job and interferes too much in day-to-day work. The appointee does not have the statutory position that comes from election.
The Government's proposal is retrograde. They should bring back effective democracy to the water industry. Setting up consumer boards does not work. Those set up for gas and electricity have no real clout and in the water industry we need the clout of local democracy.
The Bill gets rid of the National Water Council. The memorandum states that 448 people will lose their jobs. It is a sleight of hand by the Government. It cannot be argued that for the past three or four years that number of people have sat in the council's offices doodling on their blotters. I suspect most were working hard. The Minister is not abolishing their work; he is transferring it back to the individual water authorities. He will claim credit for the Government abolishing that number of jobs and say that they are efficient and the water authorities inefficient because they have had to take on extra staff to do the job that was being done nationally. He may get rid of the title of the National Water Council but most of its duties will have to be done by people in individual water authorities or in an umbrella organisation that they set up. I suspect that the same number of people will be involved. It may even require more, as often happens in reorganisations. Experts will be needed for wage negotiations and so on. Almost all the jobs that the council is doing will need to be done.
I suspect that the only reason why the Minister wants to get rid of the Water Space Amenity Commission is that it is illogical to keep it if he is getting rid of the National Water Council. He should be giving it extra staff. We have a major problem over the use of water space. Because of rising living standards and possibly because of the Government's employment policy more people have leisure time and are turning to water sports for enjoyment. We need more campaigning so that every possible water space is used for people to enjoy their recreation.
In most water leisure areas there is an appalling conflict of interest between those who want to fish peacefully and to water ski, between canoeists and those who want to go sailing, wind-surfing and so on. The best way to resolve the conflicts is to find more water. An awful lot of undertakings have water with notices saying "Keep out. Drinking water." People are forbidden to enter the area.
The Water Space Amenity Commission was effective in pressing the water authorities to make more water available for sport. It is a national disgrace that so few reservoirs are available. With the growing demand for facilities for water sports, we need more campaigning and not less.
The Bill does little to help my constituents who complain that the water industry is failing them. The Minister should have mentioned the standing charge, about which my constituents are bitter. They feel that it is unfair and imposes a penalty particularly on the elderly. The Government should clearly set out the basis on which charges should be made. They should choose either to use rateable values, which are not particularly fair, or to start to assess the needs of individual houses. Putting standing charges and rateable value into the calculation of water and sewerage charges loads the system heavily against the elderly and the single householder. That is unfair and it is a major complaint among my electorate about the water industry.


The Government must also examine water charges. The Bill should have been used to introduce a water rebate for the elderly and the poor. Local authorities were responsible for sewage disposal before water authorities were reorganised in 1973. Part of the rate bill was a charge for sewage disposal, for which one could claim a rebate. Why was it reasonable to claim a rebate on sewerage charges before 1973 and not now? The Government should extend rebates to cover both water and sewerage charges. The Government give some help towards heating charges through the social security system and they provide other assistance with household costs.
Many single householder constituents tell me that they use very little water because of their age. Perhaps they are arthritic and it is not easy for them to bathe regularly. Their washing requirements are small, they have no car to wash and they have neither the time nor the inclination to water the garden. Next door to such a constituent will be a family paying exactly the same water rate, but it may have three or four children who bathe regularly and may use a washing machine continually, thus consuming vast quantities of water.
The Government must find some way to alleviate the burden of water charges on the elderly. It is crazy that I should have constituents who are paying more in water service charges than in rates. They pay more for their water and sewerage services because they can claim rebates on other local authority services. I bitterly regret the fact that no provision for water and sewerage service rebates is made in the Bill.
The Government have not examined charges. There is a major national campaign to persuade the Government to introduce water meters. The introduction would benefit employment by providing jobs in the manufacture of meters, as well as in reading them, but that is all that can be said in favour of water meters.
I have said many times that it is illogical to meter water and not sewage. Recently, some people have suggested that sewage could be metered. That would be a crazy path for the Government to follow. Metering would be tremendously expensive because special measuring equipment would be required and it would be disastrous for public health. The Government should do nothing to encourage water authorities to adopt household metering. If they wish to help those who use little water, they should reconsider standing charges and rebates on water service charges.
The Bill should include measures to encourage water conservation. It is disappointing that for many years water authorities have demanded the right to build extra reservoirs in the countryside when vast quantities of storm water are unused. In most towns—certainly in western parts of Britain—much storm water lands on the roofs of houses and goes down the drain, thus causing pollution problems. We should consider more effective ways in which to use roof water for the domestic water system. Such water is of sufficient quality for flushing toilets and operating washing machines and the increasing number of dish washers. If we concentrated on that task, we should need fewer reservoirs, many of which are unsightly and spoil large areas of attractive countryside.
The Bill does nothing to enforce river purification. The North-West water authority has let my constituents down. The Tame and the Mersey, which flow through my constituency, are the two most polluted rivers in Britain. In the 1960s the old local authorities made a major effort

to improve the quality of the water in the area, yet since the North-West water authority has been responsible for those rivers it has made almost no improvements. There have been many working patties and discussions, but little or no improvement. In some areas the position has deteriorated. In new housing estates, schemes to bring the sewage up to the sewer levels on the slopes of the valley have failed during heavy storms and the sewage has entered the rivers. In some areas, angling clubs tried to reestablish fishing, but the sewage pollution has killed the fish. The Bill contains no measure to give my constituents hope that those rivers will once again become attractive.
The problem that causes most anxiety in the North-West is sewer dereliction. Apart from the borrowing limits, the Bill contains no measure to give us hope that we shall not endure much disruption and expense when the sewers are improved. I regret that the Government are going ahead with their proposal for heavier lorries, because much of the damage that has been inflicted on the sewers is caused by the traffic flowing above them. I hope that the Minister can tell the House one day that the Government will provide the money to reconstruct many sewers. Many construction workers in my constituency are unemployed and they would be pleased to have the opportunity to earn money by helping to solve some of the problems of sewer dereliction.
The Bill is extremely disappointing and does not meet the basic needs of the water industry. It has removed democracy even further from the industry and has removed local accountability. It gives us no system by which people can choose whether to pay high rates and have good services or to pay lower rates and have poor services. The experts must now deal with the matter. Experts tend to continue with their pet schemes and they will not respond to the demands of my constituents, who wish to have a good system but who also wish to know who is serving them and that, when they have a complaint, they can talk to an individual rather than send a letter to Warrington. The Bill fails totally to meet the needs of the nation and I hope that the House will reject it.

Mr. Stephen Dorrell: The hon. Member for Stockport, North (Mr. Bennett) began by bemoaning the fact that there has been a series of reorganisations of the water industry during the past 20 years, but went on in enormous detail about how he wished to reorganise it yet again. On which side of the fence does the hon. Gentleman fall? It is one thing to argue that if one had been around in 1963 one would have resolved the matter in a certain way, but it is another to say that, in 1982, we must destroy everything that has been done during the past 20 years and start to rebuild something different. I welcome the fact that my right hon. Friend presented a Bill that tries to improve the present position. The Bill will result in a significant improvement in water industry organisation.
There has been a continuum of concern from the Labour Party today that the new water authorities will not be democratic and that somehow the new water authorities will be too concerned with business and therefore insufficiently concerned ' with their role as a service industry.
I have never been able to understand the distinction between a business and a service industry. Indeed, some of Britain's most successful businesses are service


industries. That distinction, which has been drawn time and again by Labour Members today, is dangerous. It was most accurately defined by the hon. Member for Merioneth (Mr. Thomas) when he said that it is a service industry and should therefore be subsidised. If "service" is merely a euphemism for "subsidy", that is precisely why Conservative Members are opposed to the arguments that have been presented by Labour Members and why we therefore support the Bill.
The Bill is a logical development of the 1973 Act and therefore should be welcome. The objectives of that Act were to move away from the kind of locally based utility which had survived longer in the water industry than in the gas and electricity industries. It had precisely the same origins. All three of those utilities started life as locally based, municipally owned utilities and in all three that organisation became increasingly inefficient as the facts of modern life bore in upon them.
The 1973 Act was introduced in recognition of the fact that water had become a major service industry. The Severn-Trent water authority has fixed assets of £775 million. By any stretch of the imagination, that is a substantial business. As consumers and taxpayers we have a vital interest in the efficient management of such an industry.
The 1973 Act and the Bill organise the utility based industries as efficient modern management units. That was achieved rather earlier in the gas and electricity industries. It is entirely to be welcomed in the interests of the electorate, both as consumers and taxpayers.
The Minister made it clear in his statement in July that at the time of the 1973 Act it was always intended that the new water authorities should have professional, management-based boards. It had been a concession to the local authorities that they did not have that. I regret the fact that that was not done from the beginning. It was a pity that the change was made in the 1973 proposals. I am certain that we are right now to reverse that concession.
Why do I say that? The reason has been quoted many times by Conservative Members today. There is an essential distinction between management and politics. By and large, it is true to say that managers make bad politicians and that politicians make bad managers. The traditional, locally based arrangements within the utilities blur the distinction between management and politics. That is why the new arrangements are likely to lead to greater efficiency.
Local government should be not a management-based organisation, but a political forum. I do not mean that it must be a party political forum but political in the proper sense. It should be representative in the same sense as the House. The proper functions of local government are concerned with the resolution of local conflict. A local consensus should be provided on political subjects. Local authorities are not properly equipped to run businesses of the size of a modern utility.
The individuals in local government are not trained and the system that they operate is not suited to the skills of running a business. Furthermore, when a representative starts to run things he is likely to be unsuccessful not only in that but in his attempt to function as a representative. As my hon. Friend the Member for Morecambe and

Lonsdale (Mr. Lennox-Boyd) said, such a person could not efficiently and effectively represent his constituents in their complaints against a body of which he is a member.
The existing arrangements are bad for the utilities and also for local government because they blur the essential distinction between management and politics.
It has been argued that the larger authorities which were introduced in that Act were a good compromise between the two different ways of organising the authorities. That is not true. Far from being a good compromise, it was the worst of both worlds. As many of my hon. Friends have said tonight, it meant that members of the water authorities were not known to the people whom they were supposed to represent. Furthermore, because of the size and unwieldy nature of the water authorities, it was almost impossible for members of the water authorities to influence the authorities. The result was that the local government member on a water authority became an insider but was practically powerless within that body. In a sense, he had responsibility without power.
The existing arrangements, which preserve only a tenuous link between local democratic control and the water authorities, have been shown not to work satisfactorily. It is now much better to cut the umbilical cord which links the water industry to local government and to recognise that that utility, like others, has come of age and that modern management structures are required to run it effectively. I welcome that part of the Bill.
I want now to examine other aspects of the relationship between water authorities and local government and to ask my hon. Friend the Under-Secretary to comment on three aspects of that relationship. The first aspect concerns land drainage. I am conscious that in raising that subject I am treading in what could be a minefield. The arrangements which emerged from the discussions in 1973 were the result of a hard fought compromise. However, any impartial observer must accept that the present legislative arrangements for land drainage are a dog's dinner.
A good example of that occurred in my constituency this summer when there was a series of not so much unseasonal as freak flash storms which produced serious flooding in four separate places in a relatively small constituency. When representations were made as a result of those flooding problems, we were told that the land drainage responsibility was divided between three separate authorities. In some circumstances the county council had a responsibility for land drainage, as did the district council and the water authority. Those people who were concerned to prevent such flash storm floods recurring found it almost impossible to get the representatives of those various authorities to accept responsibility.
Although the Bill does not change the land drainage arrangements, I hope that it will be possible to reconsider land drainage to obtain a clearer division between the responsibility to act and that of representing constituents' interests. There should be the same division of duties in land drainage as in other parts of the water authorities' responsibilities.
Another aspect of the relationship between water authorities and local authorities merits further examination. I refer to the role of local authorities in representing the consumers' interest vis-a-vis the water authorities. Clause 7 provides for consumer councils. As many hon. Members have said, although the consumer councils of nationalised industries undoubtedly make a valuable contribution, they are not always the most effective forum


for bringing consumers' complaints against those nationalised industries. When considering the arrangements for representing consumer interests, I hope that my right hon. Friend the Minister will remember that the local authorities still have substantial powers and responsibilities, even with the changes in the Bill. Under the Public Health Acts they still have certain responsibilities. The responsibility to represent consumers' interests to the water authorities still has a major local authority input. In any arrangements to represent consumer interests, those responsibilities should be given a high profile.

Mr. Ogden: Apart from the local authority interest, will the hon. Gentleman bear in mind that the consumer councils could be funded, to advantage, by a Department other than the Department of the Environment? For example, if the consumer councils were funded by the Department of Trade, they might at least have a degree of independence that they would not have if they were funded by the Department of the Environment.

Mr. Dorrell: In pure theory, that point might have some validity. However, the hon. Gentleman would be hard put to it to argue that the Post Office Users National Council would be more effective if it were funded by the Department of Trade rather than by the Department of Industry. However, my right hon. Friend the Minister may be more impressed by the hon. Gentleman's suggestion than I am. It will not contribute much to the effectiveness of a representative consumers' council.
The third aspect of the continuing relationship between water authorities and local authorities concerns the section 15 agencies, which have been the subject of criticism in the recent report of the Monopolies and Mergers Commission. Clause 6 deals with that. In the explanatory memorandum the Government—or whoever wrote it—say:
Clause 6 requires the Secretary of State … to have regard to the financial consequencies for the parties.
In my innocence I would have thought that the Secretary of State had regard to that before. I am not sure how clause 6 advances the situation in relation to section 15 agencies.
The element most widely criticised about those section 15 agencies is that a duty is imposed to reach those agency agreements. In my local authority, Charnwood, there is general recognition that the system works, However, it is felt that the system does not work in other authorities in the immediate area. The Severn-Trent water authority feels that it is in some way obliged to reach an agency agreement and that it is relatively difficult to escape from that duty. I know that other water authorities have been more successful than Severn-Trent, but I hope that the Under-Secretary of State will tell us the Government's attitude towards the future of the duty to reach those section 15 agency agreements. Perhaps it is a leftover from the old arrangements for water supply and from the link between water authorities and local authorities.
Those three aspects of the relationship between water and local authorities are not brought to a conclusion in the Bill and any elucidation of those points—either tonight or in Committee—would be useful.

Mr. King: My hon. Friend the Under-Secretary will have to reply to several points and I should not like my hon. Friend's important point to go by default. As I said when opening the debate, the report of the Monopolies and Mergers Commission deals specifically with the sewerage

agencies. I hope that my hon. Friend will study it along with the consultation paper, which deals with those issues. In the Bill there is one specific minor but sensible provision. Following discussions further amendments may be tabled in the light of the responses that are made to the consultation paper.

Mr. Dorrell: I think that my right hon. Friend the Minister has taken us a stage further, because the Government have indicated their willingness to table amendments as a result of the consultations taking place.
The right hon. Member for Birmingham, Small Heath (Mr. Howell) made a great deal of the abolition of the NWC. Indeed, 95 per cent. of his comments were, so to speak, snow in the breeze. My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) made an important point when he accepted the argument for some sort of national wage negotiating body, even after the NWC"s abolition. The argument is that if the regional water authorities negotiate independently for a new wage agreement there will be substantial scope for leapfrogging. In a monopoly-based industry it becomes difficult to reach a satisfactory settlement on wages. The prospect of 10 regional water authorities all negotiating separately over wages does not fill me with joy. I hope that my right hon. Friend will encourage the water authorities—after the NWC has been wound up—to set up a national negotiation body to deal with that.
I greatly welcome the clarification in clause 5 of the public sector's power to export water technology. I hope that my right hon. Friend will hold consultations or ensure that contact is opened and maintained between our public sector water industry and the Overseas Development Administration. In developing countries the supply of running water to outlying villages and sometimes to large cities is a first and essential step on the road to development. We can give a major lead and make a vital contribution not only to their development but to the sale of British equipment to make that development possible.
My final and important point refers to the argument about professional water authority membership. It concerns the method by which water authority vacancies will be filled. I hope that my right hon. Friend the Secretary of State will not simply recruit people for the water authorities from the Civil Service list of the great and the good. I hope that occasionally there will he advertisements in the press for vacancies in regional water authorities. If one of the major arguments in favour of the Bill is that it introduces a professional management approach to the regional water authorities, one sure way of reinforcing that trend would be to recruit professional managers in open competition as other utilities and the private sector do.

Mr. King: The reason why some of us found the remarks of the right hon. Member for Birmingham, Small Heath (Mr. Howell) so offensive when he inferred that there would be jobs for the boys was that we are the first Government who, in making new appointments of chairmen of water authorities, advertise those posts widely so that we are no longer confined to a list of the great and the good, as maintained in the Whitehall machine, although I do not wish to disparage that. That is to make sure that the jobs are widely available to as wide a range of people as possible. I warmly endorse what my hon. Friend has said.

Mr. Dorrell: I am grateful to my right hon. Friend for his remarks. I hope that what has been done already with chairmen will be extended to all other members of the water authorities.
I warmly welcome the Bill. It is a modest but significant step towards reinforcing the efficiency of a major national utility. That must be in the interests of every elector either as consumer or as taxpayer.

Mr. David Stoddart: I am sorry that the hon. Member for Devizes (Mr. Morrison), who is my next-door constituency neighbour, is not here because I want to refer to what he said. I was most surprised to hear his corporatist approach to water undertakings and their management. His attitude is all the more surprising as he is vice-chairman of so many local authority associations. He does not seem to know the history of local authorities in building up our water and sewerage services over a long period.
As I served on a local authority for about 18 years and was responsible for the amalgamation on local authority terms of the water industries in Reading, South Oxfordshire and Berkshire, I know that local authorities are highly capable of operating and managing a water undertaking and sewerage services in the best way. I am most disappointed and annoyed that the Government should see fit to abolish local authority representation on the water boards and in the water industry. There is no doubt that they have done a good job in the industry for a long time.
In my constituency I have been lobbied forthrightly and thoroughly today by local authority members who are incensed at the way in which they have been treated over the Bill. They tell me—of course, I must take their word for it—that they thought that they were in the process of consultation and discussion on the Bill. They believed that the consultations and discussions would have some effect. Therefore, they were most surprised and angry when the Bill was published in its present form. They feel that they have been ignored and badly let down by the Minister for Local Government and Environmental Services, who seems to be the Galtieri of Whitehall, negotiating at one time and then taking aggressive action while the negotiations are still going on. The Minister should be ashamed of himself for the way in which he treats local authorities.
I can understand local authorities' concern because they are to lose all their control of the services. They have had representation on the boards. They have managed and controlled the services for a long time. Many of us cannot understand why the Minister hates local authorities so. Under his aegis many powers have been removed from local government. One power after another has been removed. Local authoritiy members are not even allowed to fix the rate in their own areas because the Minister does not trust them. They are told what to do with the houses they own. They are told that they must sell them whether they like it or not and that the sale should be at a discount fixed by the Minister.
Now local authority members are told that they are no longer fit to have anything to do with water and sewerage services and that their power must be transferred to a small body of the great and the good. I can understand the anger of those in my area, especially when one bears in mind the fact that Swindon forms part of the Thames water

authority, which is much dominated by London. Swindon feels that it will become even more dominated by it because Ministers will be forced in making appointments—

Mr. Spearing: My hon. Friend may recall that when we were considering the Water Bill of 1972–73 on Report I was privileged, on behalf of London local authorities, to move that London become a regional water authority on its own, based on the former Metropolitan water board and the London county council drainage system. It could have become an adequate regional water authority, and if that had happened the disadvantage which my hon. Friend has mentioned, and with which I have sympathy, would have been overcome.

Mr. Stoddart: My hon. Friend, who is an extremely able and sensitive Member of this place, had the right idea. I understand the concern that he had for provincial areas such as Swindon and the surrounding area. He recognised that their problems are different from those of London. I recognise that London has special and difficult problems. which would have been better overcome had the system which he proposed been accepted in 1972 and written into the 1973 Act. I am grateful to him for his help.
Places such as Swindon already feel that they are dominated by Big Brother. They see themselves without any representation, remote from the centre and having to take whatever is handed to them. Water and sewerage have always been rated services and up to now their representation has been directly elected. In other words, there has been taxation with representation. If the Bill is enacted, there will be taxation without representation.
Water is a life support service; it is not merely a commodity. There are public health implications when we deal with water, so it cannot and should not be treated by the Government or anyone else as a commodity. It should be subject to representation by elected representatives. The same is true, to some extent, of sewerage services.
Local authorities feel that their constituents will be taxed and that there will be no representation for them. The Bill states that the new water authorities must make proposals for consumer representation but it gives no guidance on the sort of consumer representation that there should be. If the new authorities have anything to do with it, the new consumer associations will be toothless wonders. It will not be in the interests of the new authorities to have consumer councils or consumer organisations with teeth and power.
I am surprised to hear hon. Members, especially the hon. Member for Morecambe and Lonsdale (Mr. Lennox-Boyd), criticising local authority representation. That is what democracy is about. It is no use saying that it is a good thing for local councillors to look after one service but a bad thing for them to look after another. The hon. Gentleman also argued that if local authority members sat on water boards, as they now do, there might be changes of policy if there were a change of political control. I thought that that was what power was all about.

Mr. Dorrell: Does the hon. Gentleman accept that there is a difference between the responsibility of an individual running a business, whether or not it is a service, and that of a councillor making decisions on planning or transport involving the allocation of resources


and the resolution of local conflicts? In other words, is there not a difference between the representative and political function and the management function?

Mr. Stoddart: The functioning of any organisation, public or private, may be the responsibility of people with management expertise. What is important is the policy laid down, and it is over policy that local councillors, and indeed Members of Parliament, wish to have control. When the Government took power, they had certain policies in relation to nationalised industry and they have put those policies into effect. They have altered the powers of the British Gas Corporation, they have completely transformed the British National Oil Corporation and even now they are selling off assets. It is policy that counts. I am surprised that Conservative Members should criticise local authority representation simply because a change in the political complexion of a local authority may lead to changes in policy in an organisation in the area concerned. That is what democracy is all about.

Mr. Ted Leadbitter: To emphasise the point, does my hon. Friend appreciate that under clause 1 local commissioners' investigations, which have proved so useful, are also to be ended? Moreover, under clause 7 consumer interests will be in the hands of the new water authorities. There will be no representation at all by local authorities. It is a monopoly in which the consumer's right to effective complaint and the possibility of remedying the injustice to the poor and needy will be further and further removed. All these matters will be in the hands of a remote organisation and representation by the local authority, the local commissioner or even a consumer council will be completely removed. That is the most disgraceful aspect of the Bill.

Mr. Stoddart: I am obliged to my hon. Friend. I was about to make that point. The Bill removes the power of the local ombudsman to investigate complaints put to him by local councillors or directly by consumers. As my hon. Friend says, another form of protection has been removed from the consumers. These very small bodies will not be accountable to any consumer or elected authority in their own areas. They will be subject only to the dictates of the Minister.

Mr. Spearing: And his officials.

Mr. Stoddart: And his officials. Democratic control is being removed completely from a service which is important to the people and close to them and should be under their control.
Other hon. Members wish to speak, so I shall refer to only one more point—the abolition of the National Water Council and the Water Space Amenity Commission. My right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) referred in detail to that. It is strange that a Government who prated in 1973 about the necessity for a national water policy—that was their excuse for introducing the 1973 Act—are now, nine years later, abolishing the means by which that was achieved. I cannot believe that the abolition of the authority, leaving the overall policy to 10 different regional authorities, will in any way solve the problems of a national water service.
We may currently have a superfluity of water, but, as my right hon. Friend knows, the time will come when we will need a guru to make it rain. We still need a national water policy.

Mr. Denis Howell: During the drought, problems were created because we did not have a national strategic policy. There was no national grid system for water comparable to that for gas and electricity. The Labour Government sought to provide to make water transferable from regions of plenty to regions of scarcity. That was essential in the national interest. All that planning is in jeopardy because of the Government's proposals. Bureaucrats in the Department will make plans about which none of us will have any knowledge.

Mr. Stoddart: The House will find my right hon. Friend's statement helpful. The Government's complacency will rebound against the best interests of the nation. Even such areas as South Wales, which has a devil of a lot of rain, had empty reservoirs during the drought. Although South Wales is usually a huge net exporter of water, certain parts of it desperately needed water from other parts of Wales, or even from England, which could have been provided had there been a national grid. It is absurd that the Government should abolish the National Water Council.
The Bill is ill-conceived and badly timed, and I shall vote against it.

Mr. Geoffrey Dickens: There is an old Chinese proverb, on the lines of "If men and women spoke on those subjects on which they were qualified to speak, the world would be filled with a profound and dignified silence." There is—[HON. MEMBERS: "Sit down then."]—at least one hon. Member whom all would admit is an expert on water and water resources, and that is the right hon. Member for Birmingham, Small Heath (Mr. Howell). Not only did he excel at a time of drought, he excelled during a time of great falls of snow when villages in Yorkshire were cut off. He flew over my house in a helicopter, and a thaw came immediately.
We had floods, but the moment that the right hon. Gentleman was appointed the rivers dropped, the floods subsided and the skies were blue. He can claim to know something about the matter. Nevertheless, the right hon. Gentleman disappointed me in his opening speech. He had a marvellous opportunity and with his wide knowledge I should have thought that he would have thought differently. Although I admire the way in which he handled matters as a Minister, I have never agreed with his politics. That is hardly surprising. One of his main points was his worry about the control of water authorities slipping to a Minister.

Mr. Denis Howell: A Ministry.

Mr. Dickens: The right hon. Gentleman made his name by taking control and overriding all other agencies during an emergency. I should have thought that that would undermine his argument.

Mr. Howell: I made my name by taking control as a Minister and by not leaving matters to the bureaucrats.

Mr. Dickens: That just goes to show how former football referees handle these matters.
We were discussing regional authorities that had up to 62 elected amateurs. I do not apologise for saying that. I was a councillor for 18 years at parish, county and district levels.

Mr. Stoddart: The hon. Gentleman was an amateur.

Mr. Dickens: Yes, I was an elected amateur. I was not a specialist on water matters. No reasonable person would disagree that there may be as many as 62 councillors on a regional water authority and that many of them are delegated, sometimes reluctantly, to take a place on that authority. Many water authorities have about 50 councillors and there are as many as 62 in larger ones.
Hon. Members should compare that with what the Government want to do. We suggest that there should be about nine or 15 paid professionals who have their heart and soul in what they are doing. They have paid for their technical know-how and their earnings are controlled so that if they do not do the job properly and come up with the goods they can be penalised.
The public are agitated about water charges, whether in the form of a standing charge or the charge for the water consumed. Perhaps that is more so now, as water charges have been isolated and revealed so that people can see what they pay for. Industry is also perturbed by the salary structure that runs through water authorities that is creaming off and scooping people out of industry to take higher salaries.
I have received a few letters from companies in my constituency complaining that they have lost wonderful secretaries and clerks because they have been offered £X by the water authority. The managers can find no justification paying them more although they bitterly miss them, and their absence has caused a dent in the industry concerned. It seems unfair. Water authorities should be designed for one purpose and one purpose only—to look after consumer interests. They are not doing that at the moment.
Some Opposition Members have made some nasty remarks. They have accused the Conservative Party of reorganising local government and the Health Service and said that that reorganisation has not worked. We may have reorganised the Health Service, we may now be undoing that reorganisation and doing what we believe to be better, but it is a sensible Government who will say "We were wrong the first time and will try to do better now". We cannot just sit back and allow water authorities to upset consumers in the way that they are. If we do not have some form of control, we must try to develop what we believe is a sensible and progressive system. This is what we are introducing. Other hon. Members wish to speak, and it is surprising how the time ticks on. My parting shot is this. There was a Minister who worked the impossible. Even those in the Sikh temples and the mosques were praying. They know a bit about praying for rain in India and Pakistan. I flew out from London airport and saw the cracked reservoirs at Staines. When I flew back after the Minister's appointment, they were filling rapidly. It was amazing.
No one should underestimate my hon. Friend the Under-Secretary of State. He discharged his duties in Northern Ireland tremendously. He discharged his duties with the members of the quarry associations in the recent Bill that he piloted through Parliament. I am sure that he will be successful with the Bill now before the House. I wish him luck.

Mr. Ray Powell: I am glad to follow the comedian from the Conservative Benches. It was interesting to hear what the hon. Member for Huddersfield, West (Mr. Dickens) had to say about

ailments being cured. A similar appointment was made in Wales. We had been under snow for a number of weeks. Following the appointment of my right hon. Friend the Member for Rhondda (Mr. Jones), the snow cleared and there were not even floods.
I should like to congratulate the recently retired chairman of the Welsh water authority. I am pleased to record that his successor, Mr. John Jones, has conveyed his thanks to him for his work on behalf of the water authority. In the annual report, he also thanked the officers and staff for their dedication and work especially during the blizzards of last December and January and for coping with the operational problems of burst pipes and flooding after the snow and ice had cleared. It is easy to take for granted the work of the staff during last year's severe winter.
I have been interested to hear what hon. Members have had to say about authorities becoming more democratic. I was elected a Member as an employee of the Welsh water authority. I know of the differences that can exist between elected members and appointees. I am aware of the opposition to quangos and the promises made by the Government during the election campaign to abolish quangos. The facts are that the Government are producing more quangos than existed previously. If they are not quangos, they are called consumer councils.
The Bill takes away any semblance of democracy that may have previously existed in the authorities. Hon. Members must pay close attention to the membership of these authorities. Is it to be left entirely to the Minister's discretion to decide the appointments? Will this be good for democracy? Will it be good for the water industry? If someone happens to quarrel or disagree with the Minister, he will wind up in the same place as the chairman of the Welsh water authority and perhaps without an appointment. Therefore, the Minister will have to look closely at that.

Mr. Wyn Roberts: The hon. Gentleman has given the wrong impression about the retirement of Mr. Haydn Rees, the chairman of the Welsh water authority. He retired at the end of his fixed term of office.

Mr. Powell: I do not know that I created the wrong impression—perhaps the wrong impression was given to me by my close association, over a number of years, with Mr. Haydn Rees. I was given to understand that if he had been offered a reappointment, he would have accepted. However, he was not reappointed. I do not wish to be critical, but his successor's only connection with water, sewerage, land drainage or the Welsh Office was his attachment as family solicitor to and friend of the Secretary of State for Wales.

Mr. Wyn Roberts: rose—

Mr. Powell: No, I shall not give way again.
On Tuesday 9 November the first consumer council was held in the Gower division. What are these new watchdog committees to do? Who will be appointed? Are they to have any say at local, district council or community council level on the appointments? The first council met last Tuesday to appoint a chairman, and we shall have seven local consumer councils in Wales. They will meet and will give the new Welsh water authority their views and recommendations. However, they have no authority


to handle or deal with any complaints from consumers, and they cannot scrutinise the new body. We should examine this closely again.
I do not have time to consider these committees in depth, but I hope that in Standing Committee there will be close scrutiny of them, of the way that they are set up, and who is appointed to them.
There is no better example of the imperfection of democracy than the way in which social progress is subordinated to political expediency when certain matters are under consideration. That is what is happening to democracy under the Bill.
The most far-reaching effect of the Bill is the abolition of the National Water Council. On 20 October 1982 the annual report of the council was published. The chairman made some comments about the abolition of the body. I quote from the condensed version of the annual report:
Sir Robert Marshall, chairman of the Council, warns. Such responsibility should remain within the industry.
Sir Robert says he cannot 'do otherwise than express my great regret about the Government's decision to abolish the National Water Council' and he insists that the need for an independent central body has not ceased because the water authorities are firmly established.
'National policies and objectives for the industry will still be needed', he says, 'sometimes on matters in which the Council has already played a major part in consultation with the authorities and companies, elsewhere on new or neglected problems of concern to the whole industry.'
I shall not read everything that he said, but I hope that before the Bill goes into Committee the Minister will look at what Sir Robert has said and take it into consideration. Perhaps the Minister will also provide a breakdown of his assessment of the savings if the National Water Council is abolished.
NALGO is the major trade union involved in the water industry. What of its view of the abolition of the NWC? That union negotiates at national level because it represents the majority of staff in the water industry. It is totally opposed to the abolition of the NWC and claims that it plays a crucial role in the water industry. It emphasises the council's functions, such as training and industrial relations, and argues that it should be retained because the alternative will be unable to undertake the council's current functions.
What will happen to the negotiating machinery that is at present the responsibility of the NWC? What are the Government's proposals on training? What pension offer will the Government make to the unions? How will they establish a negotiating machinery to deal with disputes and grievance procedures?
The union argues that
the abolition of the Council will be highly disruptive … there is no evidence of the gains to be achieved as a result … new machinery, similar to those currently within the Council, will need to be established … the cost of establishing and running this new machinery will be equal to, if not greater than, that currently operated within the Council … the Government's proposals are based on political considerations, and do not take adequate account of the long-term needs of the industry, its staff and consumers … NALGO urges the Government to reassess their decision to abolish the Council.
I asked the Prime Minister
whether, following the announcement of Her Majesty's Government's proposals for the reorganisation of the water industry, she will now take into account the possibility of requiring a standard water rating system throughout England and Wales".
The right hon. Lady replied:

We have no plans to change the existing arrangements whereby individual water undertakers are responsible for their own charges."—[Official Report, 22 July 1982; Vol. 28, c. 238.]
I urge the Government to give serious consideration to that negative reply, and I urge the Minister to take account of the inherited loan debt that has substantially reduced freedom of action. That debt, which was inherited from the various boards and authorities, should be wiped out. The cost of the high interest charges would then be removed and the water rate could be reduced.
We should aim to produce a pattern for water that is acceptable because it is thought to be right and not one thought to be right because it is acceptable. We should look for a system that would meet not only the requirements of today but the needs of tomorrow.

9 pm

Mr. Den Dover: As soon as I became the Member for Chorley three and a half years ago I was waylaid by a number of people who had formed themselves into an informal water consumers council in my area. Numerous complaints followed that had to be dealt with in surgeries or by letters. Those complaints show that my electors do not have much faith in the operations of the North-West water authority.
Following reorganisation of the water authorities some years ago, I looked at their activities and thought that there should be elected members. I investigated how one would raise a matter with one of the local authority representatives on the North-West water authority. Although our local authority has an electorate of 80,000 people it has no representative on the water authority, and nor does the neighbouring authority. There is one distant county council represented on the water authority.
The North-West water authority area is large and some of the local authority representatives live 40 or 50 miles from the offices where the meetings are held. I began to wonder whether election of representatives would solve the problem. I concluded that local authority councillors had more than enough on their plates representing their electors on the local council. Their position on the water authorities is a reward for their local activities. We are not getting value for money from the representatives that we have. I do not want to criticise their activities, but the present system does not work.
I welcome the Government's intentions to have a much smaller body comprised of some full-time officials of the water authority. I believe that it is a management problem, and that if the water authority is controlled sensibly in terms of finance and management the consumers of the area will be better served. I consider that the arrangements to be made by each water authority to take consumer interests into account are a major part of the Bill. We must ensure that we have formal consumer councils operating inside a water authority geographical area. A water authority may need a dozen such consumer councils. Only then will local problems be raised and dealt with by local officers.
I believe that will ensure that we have better value for money, more local accountability and a much more efficient water industry.

Mr. Lambie: Why does the hon. Gentleman support the setting up of more quangos? I thought the Government's policy was to abolish quangos. Why does the hon. Gentleman not support the type of organisation


that we have in Scotland where water and sewerage are under the control of regional authorities, and where water is no longer a political problem? Both Conservative and Labour Members are happy with a set-up that does not need quangos. The regional authority does everything as a committee function with local councillors. We have local representation, a local voice and no quangos. It is strange that the Government wish to see more quangos when the Prime Minister wishes to eliminate them.

Mr. Dover: They are to be not quangos but local consumer centres where problems can be dealt with by the officers. If they do not work properly, we should see that a better system prevails. The Government are not setting up quangos by introducing the consumer mechanism. Indeed, a quango can only operate nationwide.
Water authorities use local authorities as their agents for sewerage works. I hope that water authorities will not now get rid of the servants and officers of the local authorities who have carried out those functions well and increase their own work forces. Not only should local authorities continue to be used as agents, but we should bring in private enterprise. Private contractors may not be able to perform certain statutory functions, but involving the private sector could provide better value for money. Local firms with no overheads could give a quick and efficient service. I hope that water authorities will not use the change as an excuse to build empires. I pay tribute to the first-class service given by local authorities as agents for water authorities.
We should think seriously about the provision of water. Hon. Members receive many complaints from their constituents about the large bureaucratic body that hardly appears to be answerable to the electorate. The Bill is a move in the right direction. We need more accountability, better value for money and more involvement of the consumer and of the business sector, which pays more than 50 per cent. of the water rates. It would be good to see business men on the water authorities.
I welcome the Bill and shall vote for it.

Mr. Alec Jones: When I was first elected to the House I was impressed by the zeal with which Governments loved to reorganise. I have served on so many committees reorganising various aspects of our public life that I am surprised that by now we have not perfected some of those spheres.
Not only are the Government keen on reorganising; they are obsessed with reorganising the organisations that they have already reorganised. In 1974 the Conservative Government extolled the virtues of a reorganised National Health Service. They commended the change to the nation and forced it through the House. In 1981 the Secretary of State for Wales said that the brainchild of the present Secretary of State for Education and Science was an "over-elaborate paraphernalia" of administration.
In February 1973 the right hon. and learned Member for Hexham (Mr. Rippon), who was then Secretary of State for the Environment, described the Water Act 1973 as
a radical reconstruction
enabling us

to keep pace with the problems with which we shall have to deal through the remaining decades of this century".—[Official Report, 5 February 1973; Vol. 850, c. 34.]
The Act has hardly lasted through the twentieth century because we are again discussing the reorganisation of water authorities in England and Wales.
The Welsh water authority has already been reorganised after an Order passed last year. Welsh people have thus had some experience of the second phase of water authority reorganisation and have some idea of how the Government regard the water authorities' role and appointments to those authorities. Now that the Government's consultative document on Wales has been published, we also know how the new consumer councils are to be set up.
Water authorities have been and always will be criticised in the House. The main criticisms that are levelled are remoteness, bureaucracy and, above all, charges. By almost abolishing local authority representation the Bill exacerbates the problem of the remoteness of water authorities from the general public. The Bill is also likely to increase water authority bureaucracy. We shall now see power concentrated in the hands of fewer non-elected individuals.
The Bill fails completely to tackle the wide and unfair variation in water charges. The Conservative Party manifesto for Wales stated:
We shall seek to enlarge the responsibilities of local authorities.
Those words were omitted from the Conservative Party manifesto for the rest of the United Kingdom. Far from enlarging the responsibility of local authorities, the Bill continues to undermine it.
Local authorities are responsible for housing, environment, planning, education and social services and they are also responsible for developing those services—all of which depend on adequate water and sewerage services. Because organisations such as the Association of County Councils and the Association of District Councils are so dependent on water and sewerage services and have so much experience of them they have denounced the proposals as a denial of local democracy. Such organisations say that the proposals ignore the vital need for co-operation between water authorities and other local government services.
I am sorry that the right hon. and learned Member for Hexham is not present. During the Second Reading of the 1973 Water Bill the right hon. and learned Gentleman said:
Therefore, I am convinced, as I hope the House will be, that the provisions in the Bill governing the constitution of the regional water authorities provide a far better way of associating the democratic element in local government with the administration of water services in the new system."—[Official Report, 5 February 1973; Vol. 850, c. 38.]
The Government have no regard for any democratic element in local government. When the Government were in Opposition they purported to dislike quangos, but I suspect that they have created more than almost any other Government. The Government are now proposing to turn 10 water authorities that are responsible for billions of pounds in capital financing and revenue expenditure into paid quangos of 15 placemen who will owe their places on the new water authorities to the patronage of the Secretary of State.
My hon. Friend the Member for Coatbridge and Airdrie (Mr. Clarke) tried to ask the Minister about the remuneration of members of the water authority. In


fairness to him, I believe that the Minister misunderstood my hon. Friend's point. Perhaps the Minister will tell us when he replies what the Government mean by schedule 1, which states that members of the authority will not only be paid but will be pensionable. We shall have paid, pensionable quangos instead of democracy.
The Minister may say that local authorities have the right to nominate, but the Bill does not say that. Even if it were true, the Secretary of State can reject the nominee. The Secretary of State for Wales has already done that. The Welsh Counties Committee nominated two members, one from North and one from South Wales, but the Secretary of State rejected the nominee from West Glamorgan and substituted one of his choice. If the Secretary of State for Wales can do that, so can the Secretary of State for the Environment.

Mr. Dickens: Can the local authority nominations be considered seriously if there are historical links between the authority and the water industry? If the nominees do not match the criteria, there may be a problem.

Mr. Jones: The nominee of the Welsh Counties Committee who was rejected has considerable experience and represented West Glamorgan, which is one of the largest Welsh counties, on the water authority. The result of the rejection means that Wales, with eight counties and a population of about 2½ million, has only one representative. However, the old county of Hereford, with a population of 140,000 has a representative of its own. I hope that the Minister will assure the House that he will not use his powers of appointment in England as arbitrarily as does the Secretary of State for Wales.
Does the Minister believe that the water authority meetings should be held in public or in private? The Western Mail, a newspaper in South Wales, wrote that in the four full meetings of the Wesh authority held to the end of July 44 items were discussed in public and 33 in secret. On one agenda, there were 20 confidential items and just four ordinary items for discussion in public. Even a report on public information was considered in secret. Such excessive secrecy is not in the best interests of consumers, nor is it likely to develop confidence in the water authority. I hope that the Secretary of State for Wales will ensure that such practices cease and that the Minister responsible for water authorities in England will discourage excessive numbers of secret meetings.

Mr. Lennox-Boyd: Will the right hon. Gentleman give way?

Mr. Jones: I have already given time to Conservative Members from my winding-up allocation. I shall not be able to finish if I give way again.
Clause 7 places reponsibility on the local authority to establish local consumer advisory committees. If the Bill goes through, I wish those committees well. We shall have seven in Wales and an unknown number in England. However, with the best will in the world, they will have an impossible task. According to the guidelines issued by the Secretary of State for Wales—the Minister confirmed today that the English guidelines would be much the same—the consumer advisory committees will have powers to consider any matter, to make recommendations, to make complaints, and they may be asked for advice. However, there is no guarantee that their considerations, recommendations, complaints or advice will be heeded.

They will be absent from the decision-making body. The consumer's voice must be heard and their interests must be taken fully into account before decisions are made.
I cannot understand why, in clause 1(2), it is necessary that water authorities should no longer be investigated by local commissioners. I should have thought that, even though one is going perilously close to turning the water industry into a nationalised industry, no one has yet justified that change which denies the local commissioner a role in water services.
Even if the consumer councils are to fulfil a minimal role—what was described earlier as "a tame watchdog"—they need to be given far greater independence from the water authorities. The committees are to be appointed by the water authority. It seems odd indeed that I should appoint the body that is to keep an eye on me. It says that in the guidelines that I mentioned earlier. Half the things that are not in the Bill are clearly in the guidelines.
The secretary of the consumer councils is to be an officer of the authority appointed by it. There will be a tame watchdog there all right. The extent of the secretarial service to be provided, or any other facility, is to be decided not by the consumer council but by the authority. The chief executive of the water authority will even decide what technical and professional advice it is to be provided with.
It is reported that the Welsh water authority published a memorandum which said:
I foresee these bodies"—
the so-called consumer bodies—
being as much public relation vehicles for the authority as they are vehicles of redress for the consumer".
Is that really how the Government see the bodies being set up in England? Will the Under-Secretary of State for Wales at some stage give us some view as to whether that is a reasonable approach by the water authority to those consumer councils? I thought we were talking of great new armaments and controls for the consumer.
Clause 8 concerns the repeal of the Water Charges Equalisation Act 1977. I know that the Tories never liked it, that they voted against it and delayed its implementation. They have ceased to use its priorities and now they propose to kill it off. Despite all the criticisms—I have never seen them spelt out clearly yet—the Act was worth between £3 million and £3½ million between 1978 and 1981 to the Welsh water authority, and hence to the domestic water consumers in Wales. Its abolition only adds to the feeling of unfairness in Wales regarding domestic water charges.
It is right that we should seek to organise water supplies in Britain so that water can be transferred from areas of abundance to areas of shortage. It is certainly abundant in Wales. If anyone can find a way of taking it before it falls to the ground, they are welcome to it. Such a transfer might be from Wales to England, or, as could happen in a drought, from parts of England to Wales. We need an equally civilised and fair system of charging for the water. The figures for 1982–83 clearly show that the average domestic water service charge for Wales is £44·60 while that for England and Wales is £33·10. As long as that difference persists, it will be unfair to Wales and is demonstrably so. That must he remedied if the free flow of water is to continue. In July 1979 the Secretary of State for Wales seemed to agree with me. He said:


There is no question that water charges are an issue of major concern in Wales".
Water charges were of major concern in 1979. It is now 1982, but the Government have done nothing about them.
However, as hon. Members have spelt out, methods are available. I shall mention only two schemes. Perhaps one should allow an increase in the charges made by the Welsh water authority for the bulk supply of water to other water authorities. Alternatively, some new equalisation scheme could be introduced. I think that it was the hon. Member for Merioneth (Mr. Thomas) who went into the details of increased charges. In October 1981—a long time ago—the Welsh water authority made such a request. I willingly concede that there were genuine reasons for delay. However, the matter has now gone on for long enough. In opening the debate, the Minister said that this issue was now actively before Ministers and that a decision could be expected shortly. I hope that the decision will be made in time for it to be included when setting water charges for Wales next year. We have not heard any explicit comment. The Minister merely said that he expected a decision shortly.
If the increase in charges does not go wrong it will become more essential than ever to have some sort of equalisation scheme. The Under-Secretary of State for Wales has always been a great advocate of water equalisation schemes. The hon. Member for Merioneth has cited one of his indiscretions. In turn, I shall remind the Under-Secretary of what he said in the Welsh Grand Committee in July 1979. He said:
in principle we recognise that a system of equalisation is the right way to achieve a balance between water authorities, and the Government will be giving their consideration to the best way in which this can continue to be achieved.
I hope that the Under-Secretary will elaborate on that great consideration. He has told us that the principle of equalisation is right. Therefore I am sure that he will be able to tell us the Government's conclusion and the type of equalisation scheme that we can expect.

Mr. Wyn Roberts: Is not the right hon. Gentleman as aware as I am that since making that statement and since orders were made under the Water Charges Equalisation Act the position deteriorated to a point at which the Act was not working in favour of 42 per cent. of consumers in this country? Even when that Bill was passed we knew that it would have, in due course, an adverse effect.

Mr. Jones: The Under-Secretary of State knows—and if he does not, his advisers will tell him—that when the Bill was introduced it was known that it would have a diminishing effect. The instruction was that the NWC was to co-operate with the water authorities to introduce a more permanent equalisation scheme. The hon. Gentleman conceded that. It was not suddenly discovered after he made that statement. Even in that statement, he said:
As it stands that Act is cumbersome and expensive to administer, and we may have to see whether it is possible to simplify it."—[Official Report, Welsh Grand Committee; 18 July 1979; c. 13-31.]
Is the Under-Secretary of State now saying that the Government have concluded that there will never be a water equalisation scheme in Wales? We want to know the answer. If the Under-Secretary of State can tell us, I shall gladly give way.

Mr. Wyn Roberts: An inter-departmental committee was looking for an alternative to the partial equalisation scheme in the Act. No such satisfactory alternative was ever found.

Mr. Jones: I take it that what the Minister has just said is that as long as we have a Conservative Government Wales will never have a fair deal on water charges.
In the absence of either of the two schemes it is not good enough for the Government to say that only general rates can be rebated because they are a tax on the beneficial occupation of property. Most domestic consumers regard water rates as in the same category as other rates. They are based on the rateable value of the property.
The Government have a new love of price freezes. They have decided to freeze prices of gas for industry and electricity charges. In the run-up to the general election, which is always looming in the Government's mind, it is possible that they will consider limiting or freezing the increase in water charges. If they do so, I shall give them my full support. My time is limited now, but in Committee we shall go into those matters in greater detail.
Because the Bill increases the remoteness of water authorities, adds to bureaucracy and to the patronage of Secretaries of State and runs away from the difficult problem of water charges, we shall vote against it.

Mr. Lambie: On a point of order, Mr. Deputy Speaker. Since the Bill has serious implications for the National Water Council training centre at Melvin House in my constituency and for the regional councils and river purification boards in Scotland, it is a disgrace that no representative of the Scottish Office is present.

Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. That is a point of argument, not a point of order.

Mr. Lambie: I have not reached my point of order.

Mr. Deputy Speaker: Order. The hon. Gentleman took some time to reach the last point of order. Is this a new point of order?

Mr. Lambie: I am coming now to my point of order. There is a Minister representing England and a Minister representing the Welsh Office—

Mr. Deputy Speaker: Order. That is the same point of argument.

Mr. Lambie: I am coming to my point of order. I am asking you, Mr. Deputy Speaker, whether you have the right to summon to the Chamber the Secretary of State for Scotland and the Minister responsible for local government in Scotland—

Mr. Deputy Speaker: Order. The hon. Gentleman made that point in his speech. He knows that I have no such authority.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): I shall try to answer the points that have been raised by the hon. Member for Central Ayrshire (Mr. Lambie). I know that he has a problem in his consitituency. I shall see that the matter is referred to the Under-Secretary of State for Scotland so that he can reply to the hon. Gentleman by letter.
I congratulate the right hon. Member for Rhondda (Mr. Jones) on bringing such a fine demonstration of thrill and excitement to the debate. Interventions have been made


about the Welsh water issue. Thanks to them and the intervention by the hon. Member for Central Ayrshire, there has been more Celtic excitement than English excitement around the measure. However, that in no way detracts from the considered views on both sides of the House about the Bill.
Equalisation will be further discussed in Committee, as the right hon. Gentleman said. Equalisation in relation to water charges is not a cosy Welsh arrangement that affects only Welsh Members. I remind the right hon. Member for Rhondda as he sits within one yard of the right hon. Member for Birmingham, Small Heath (Mr. Howell), whose constituents have to pay substantially for Welsh water costs, that there must be fair play and agreement. I hope that the undertaking of my hon. Friend the Under-Secretary of State for Wales to deal with the matter under determination as soon as possible—I emphasise that such a decision will be made in time for the issues that are to be determined by the Welsh water authority next year—is one that the right hon. Gentleman wishes to have.
The debate has ranged over a number of issues. The right hon. Member for Small Heath presented his usual robust defence of the central authority for water and demonstrated his general capacity to act as a shop steward on these occasions. I venture to suggest that in his closing remarks he went rater further than he intended. He said apropos the appointments currently being made for the chairmanships of the water authorities that, were he to be returned to office in the Department of the Environment, he would, as a member of a Labour Government, remove such appointments. I am sure that he did not wish to suggest that he would have powers under any statute so far passed to enable him to do such a thing without carefully considering the contracts of employment that had been made. I am sure that the right hon. Gentleman would not wish to suggest that there is some incipient threat over the appointees who have been selected to chair and run these important undertakings.
I welcome the remarks of my hon. Friend the Member for Newcastle upon Tyne, North (Sir W. Elliott), who gave his support for the Bill. I welcome also the comments of my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths). He has certainly seen a number of measures come before the House dealing with water and local government. I shall try to clarify one issue which he and I suspect others have misunderstood. My hon. Friend suggested that the Bill would break completely the links with local government. That is not so. Provision will be
made for local authority associations to make nominations for the appointments to be made to the new authorities. Clause 1 states that my right hon. Friend the Secretary of State will give proper consideration in making appointments to the qualifications of those who are offered for appointment. They shall
in the case of the regional water authorities, be persons who appear to him to have had some experience of, and shown capacity in, some matter relevant to the functions of water authorities".
It must be concluded that one of the tragedies, perhaps, of the local government system of representation on existing authorities is that it has not worked because numerically it has been overwhelming. I think that it has been admitted by hon. Members on both sides of the Chamber that the appointees from the representative councils were not as committed to the running of the authorities as we would have wished. I do not think that

that has been said in any sense of disrespect to local government appointees. It is a fact that the system hardly made it possible for them to have that degree of commitment.
We know from the comments made by the chairman of the Thames water authority of the appalling effect that the many changes in appointees have had. Deputies have arrived for one meeting only and 200 per cent. of the local authority nominees for the Thames water authority changed in the nine years of the authority's life. These distortions cannot be accepted as producing a sensible method of running a water authority. If, as the right hon. Member for Small Heath suggests, they are demonstrations of democracy, they are demonstrations that hardly add to the public's confidence in water authorities and in the way in which they are run.
My hon. Friend the Member for Bury St. Edmunds talked about research. It is extremely important and nothing that is proposed by the Government in the Bill should result in a diminution of the research effort of the water industry. The water research centre is the vital research organ for the industry and it is fully supported by the individual regional water authorities. If for some reason a regional water authority wishes to withdraw its support, under section 24 of the 1973 Act the Secretary of State has power to direct a water authority to make suitable research arrangements. My hon. Friend can take it from me that the continuity of commitment to research is a real one so long as this Government remain in office.
Many hon. Members talked about their own regional water authorities and the difficulties experienced in overcoming the various problems. They should be aware, however, of the wide remit of the water authorities and how effective many of them are becoming at discharging their obligations. The water authorities may not be as reflective of consumer demand as one would wish, but few who have read the most recent reports can fail to be impressed by the wide range of activities undertaken. I have here the Anglia water authority report. The section on recreation covers byelaws, navigation, canoeing, sailing, angling and nature reserves—all under the direct control of the Anglia water authority.

Mr. Spearing: And all thanks to the Water Space Amenity Commission.

Mr. Shaw: The authority's fisheries policy is a measure not just of the sports aspect but of the wider importance of that activity. The authority also deals with water resources, land drainage, sewerage, sewage treatment, and so on—not just the provision of pure water to consumers.
The regional water authorities are important regional institutions supplying a wide range of services, most of them to an increasingly high standard. Let us, therefore, give due praise to the authorities for reaching such high standards despite the incubus of a management structure the sheer scale of which the Monopolies and Mergers Commission report on Severn-Trent found to be excessive. Indeed, I know that my hon. Friends have already drawn considerable comfort from the major proposition of the Bill to reduce the size of the boards to more manageable proportions.
On the crucial matter of efficiency, my hon. Friend the Member for Bury St. Edmunds was anxious that efficiency audits and the like should continue to be undertaken. As


he knows, the Government have not been slow to use the instrument of the Monopolies and Mergers Commission to investigate water authorities and, more recently, the sewerage agency. He will also be aware of the use that has been made of consultants and the way in which auditing has been carried out. There is a real need to ensure efficiency and to maintain pressure to ensure that the monopoly position of water authorities is examined from time to time so that public confidence may be increased.
The hon. Member for Isle of Wight (Mr. Ross) asked a question about sewerage that I cannot answer at this moment, but I will write to him about it. His point related to sewage interceptor traps. That is no doubt something that an Under-Secretary of State winding up a debate should try to avoid. I appreciate that there is a lot in drains, but I am not sure exactly where the interceptor trap comes in. I imagine that it is something between a public utility boundary and the arrival of a single connection. The complexities of the sewerage provisions of the Public Health Act 1936 are not my bedside reading, but I will try to disentangle them and to throw some light on the problem.
My hon. Friend the Member for Reading, North (Mr. Durant) expressed anxiety about the future of the Thames Conservancy. As I am sure he knows, the Thames Conservancy per se was wound up in April 1974, but a Thames conservancy division continued until 1 April 1982. I understand that in the recent reorganisation that division ceased to exist, its catchment-wide functions being absorbed into the regional headquarters organisation of the Thames water authority while its other functions went to the other multi-functional divisions of Thames. If the position has altered, I will write to my hon. Friend to update that information.
The support of my hon. Friend the Member for Devizes (Mr. Morrison) was especially welcome, bearing in mind his long association with local authority associations at both county and district levels. Although the local authority organisations have vigorously opposed at least some parts of the Bill, individual councils have taken differing views. That is understandable, because when one is dealing with a measure on which some take one view and some another there cannot be unanimity. I welcome the way that hon. Members, especially my hon. Friend the Member for Devizes, have recognised the necessity for making structural changes, even if it means removing the local authority majority. I shall say a few words later about where local authorities may find new and fruitful ground for using their considerable expertise.
My hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) raised a number of interesting points. He referred to the divisions in which consultative consumer bodies could be established. He said that the North-West water authority had three large divisions, which were not suitable for that purpose. We hope shortly to publish our proposals for establishing consumer bodies. There will be plenty of room for flexibility. The whole object of the proposals that we hope to lay before the Committee will be for individual regional authorities to have a consumer structure that is suitable not only for their geography—which varies considerably—but for the needs and interests of their areas.
The House far too infrequently considers the vast difference between regional water authorities. The

problems of the South-West, with its difficulties of obtaining resources, of the North-West with its sewerage dereliction and Anglia with its major drainage problems all require different expertise, a different system of consultation with interested consumers and those most affected and, above all, a common commitment to achieve their particular roles. The Bill is before the House to help to achieve that, and the consultative committee structure will shortly follow.
My hon. Friend the Member for Loughborough (Mr. Dorrell), in an extremely effective speech—I regret that I did not hear most of it—[Interruption.] I am sure that, had I heard it, I would have found it an even more effective speech. Such is the supreme omniscience of my right hon. Friend the Minister that he supplied me with the important details. My hon. Friend the Member for Loughborough was concerned with the complexities of land drainage arrangements, and I share that concern, but the position is not quite as confusing as the sewerage sections of the 1936 Act. There are real problems in the overlaps among the Ministry of Agriculture, Fisheries and Food, the water authorities and others. An interdepartmental committee has been set up, which will include a review of land drainage arrangements. It will produce a report on simplifying the systems under which those arrangements are made.
The hon. Member for Ogmore (Mr. Powell) complained about the lack of local democracy in the proposals. That leads me to consumer consultation. All hon. Members must agree that the original intention of using local authority members to represent consumers on water authorities has failed to give consumers confidence or to impress upon water authorities the importance of settling consumer issues. As we are reducing local authority representation, we must seek a new method of forming consumer consultation bodies, and we intend to do that through the new consultative committees.
The right hon. Member for Rhondda rightly reminded us that in Wales not only the restructuring of the authority but the consultative committee process has begun and seven committees have been established. The intention for England is to consult widely water authorities and consumer interests on what might be the best form of guidelines for consumer committees.
The Bill provides that water authorities will have the statutory obligation to produce schemes of consumer consultation that the Secretary of State will approve for the area for which they are designed. I emphasise that they will be for an area because those schemes could vary between one area and another.
I assure the House that the consultative committees will prove effective in so far as the terms of reference that we have produced for them are concerned. It is important to allow the committees to be properly representative of consumers and other interest groups. They should, therefore, be set up in each divisional area of a water authority. There are three major divisions in the North-West area. As the area is large, there may have to be four consultative committees. The important fact is that in each water authority's area there should be a committee for a division, not for the whole area.
We also advise in the guidelines that every district council within a water authority's area should be represented on the consultative committees. We imagine that other local authority groups such as county councils would also wish to be represented. Moreover, we


anticipate that the representatives will include farming and industrial interests and consumer and amenity groups. The water authorities will be responsible for setting up the committees and we are anxious that they provide major matters for discussion, such as charging and charging policy and capital investment and capital investment policy. A wide remit of all matters that are of serious interest to consumers should be able to be discussed at consultative committees.
The consultative committees would therefore have real access. They would discuss problems and be able to be more locally representative of the interests that district councils and other consumer groups wish to discuss. I hope that I have given the House the flavour of the guidelines that we shall produce. I hope that hon. Members will recognise that we are genuinely trying to make a major step forward to remedy what has been a conspicuous lack—effective representation of consumers on regional water authorities.
The Water Space Amenity Commission is not an odd part of the Lord Chancellor's Department; it is the Water Space Amenity Commission that was set up with the National Water Council. It is to be abolished. Many hon. Members were anxious that its abolition should not mean the demise of the amenity interest and the progress that has been made towards recreational activities. I assure the House that nothing is further from the truth. The main reason for the WSAC's abolition is that it has fully carried out its initial remit and it has broadly completed its work load. The right hon. Member for Small Heath will concede that regional water authorities have fully accepted the importance of recreation and amenity activity. Their reports make it clear that authorities have directors who are specifically involved with recreational and amenity activities, and that they already have full discussions with regional sports bodies, including regional councils. That is how it should continue.
We are not withdrawing the importance of amenity and recreation. We are telling regional water authorities that they have demonstrated their capacity with regard to regional amenities and recreation and that they must continue. It will be up to the Government to ensure that regional water authorities and their consultative consumer committees keep the focus on amenity issues. It is clear that regional water authorities are a major and increasing source of sporting activity and recreation.
The importance of the measure cannot be overestimated. As hon. Members have said, it deals with what is practically the most important service that any Government can provide—water. There is no genuine alternative to it.
The reasons why the Government now consider it is necessary to make these changes have been disclosed in part in the comments made about the report of the Monopolies and Mergers Commission and in the general observations made about the efficiency of the regional water authorities.
I wish to make it clear that this is not in essence a destructive measure. It is a measure that acknowledges that the regional water authorities have fully come of age in relation to their duties and that they have demonstrated a significant capacity to run large businesses under extremely difficult conditions. What is important now is that the structure that is set up for the future of these authorities should be capable of responding to the

challenges ahead. There can be no doubt that boards of 47 or 65 are an anachronism if we want to see efficient use of the nation's resources.
Some of the major historical links between water authorities and local government no longer exist. Originally, the water authorities took over from local authorities the assets of water supply and of sewage treatment. We are now 10 years on. There is no reason why the original owner of the assets should be a participant in the operation. The fact that local authorities have not been able to discharge the consumer obligation in the manner intended is a reason why local authority membership should be significantly reduced. The fact that local authorities acted originally as the agents for billing for water authorities whereas virtually all authorities row bill direct is another reason why the local authority influence on regional water authorities should be reduced.
The connection between regional authorities and local authorities has undergone major change over the past 10 years. Local authorities, I believe, recognise this to be the case. There is no question that local authorities feel that the regional water authority is a separate organisation and that it busies itself with different matters. It is clear that local authorities are not queuing up to fill the vacancies that occur on regional water authorities for the representation of local authorities.
There have been significant changes in the context in which regional water authorities carry through their statutory responsibility. The Government are attempting in the Bill to make it clear that regional water authorities should now have a much more decisive and efficient management structure. We base these recommendations not only on the investigations of the Monopolies and Mergers Commission but on observations of what has occurred in various local authorities over a considerable period.
Hon. Members have made it clear that they want to see more accountability to the House. The role that the Secretary of State for the Environment now takes for water matters and will take when the Bill becomes an Act means that there will be much more direct accountability. The appointees to the water authorities will be those of the Secretary of State or the Minister of Agriculture, Fisheries and Food. There will be the opportunity to consult and question on these matters.

Mr. Stephen Ross: Will the hon. Gentleman deal with the issue of water authorities responding to hon. Members?

Mr. Shaw: I agree entirely with the hon. Gentleman. Water authorities should respond to hon. Members who wish to question them, to visit them or ask them to intervene on matters that affect their constituencies. There are very few authorities, so far as I am aware, that fail to respond when hon. Members seek to obtain assistance. I should be grateful if the hon. Gentleman would write to me about any point he has in mind.
The Government expect to see the regional water authorities under the Act discharge their responsibilities with greater efficiency. We expect them to be able to satisfy consumers through the committees that they appoint that they are sensitive to local needs and can discharge their obligation. Above all, we expect to see them continue to increase the high standard of provision of water and to improve river quality and the discharge of


their sewerage functions in such a manner that the country can claim that we have the highest standards of water treatment anywhere in the world.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 284, Noes 230.

Division No. 9]
[10 pm


AYES


Adley, Robert
Dunn, Robert (Dartford)


Aitken, Jonathan
Durant, Tony


Alexander, Richard
Dykes, Hugh


Alison, Rt Hon Michael
Eden, Rt Hon Sir John


Amery, Rt Hon Julian
Eggar, Tim


Ancram, Michael
Elliott, Sir William


Arnold, Tom
Eyre, Reginald


Aspinwall, Jack
Fairbairn, Nicholas


Atkins, Rt Hon H.(S'thorne)
Faith, Mrs Sheila


Atkins, Robert(Preston N)
Farr, John


Atkinson, David (B'm'th,E)
Fell, Sir Anthony


Baker, Kenneth (St.M'bone)
Finsberg, Geoffrey


Baker, Nicholas (N Dorset)
Fisher, Sir Nigel


Banks, Robert
Fletcher-Cooke, Sir Charles


Beaumont-Dark, Anthony
Fookes, Miss Janet


Bendall, Vivian
Forman, Nigel


Bennett, Sir Frederic (T'bay)
Fowler, Rt Hon Norman


Benyon, Thomas (A'don)
Fox, Marcus


Benyon, W. (Buckingham)
Fraser, Rt Hon Sir Hugh


Best, Keith
Fraser, Peter (South Angus)


Bevan, David Gilroy
Gardiner, George (Reigate)


Biggs-Davison, Sir John
Gardner, Edward (S Fylde)


Blackburn, John
Garel-Jones, Tristan


Blaker, Peter
Gilmour, Rt Hon Sir Ian


Body, Richard
Glyn, Dr Alan


Bonsor, Sir Nicholas
Goodhart, Sir Philip


Boscawen, Hon Robert
Goodhew, Sir Victor


Bottomley, Peter (W'wich W)
Goodlad, Alastair


Bowden, Andrew
Gorst, John


Boyson, Dr Rhodes
Gow, Ian


Braine, Sir Bernard
Gower, Sir Raymond


Bright, Graham
Grant, Anthony (Harrow C)


Brinton, Tim
Greenway, Harry


Brittan, Rt. Hon. Leon
Grieve, Percy


Brooke, Hon Peter
Griffiths, E.(B'y St. Edm'ds)


Brotherton, Michael
Griffiths, Peter Portsm'th N)


Brown, Michael(Brigg &amp; Sc'n)
Grist, Ian


Browne, John (Winchester)
Grylls, Michael


Bruce-Gardyne, John
Gummer, John Selwyn


Bryan, Sir Paul
Hamilton, Hon A.


Buchanan-Smith, Rt. Hon. A.
Hamilton, Michael (Salisbury)


Buck, Antony
Hampson, Dr Keith


Budgen, Nick
Hannam, John


Bulmer, Esmond
Haselhurst, Alan


Burden, Sir Frederick
Hastings, Stephen


Carlisle, John (Luton West)
Havers, Rt Hon Sir Michael


Carlisle, Kenneth (Lincoln)
Hawkins, Sir Paul


Carlisle, Rt Hon M. (R'c'n)
Hayhoe, Barney


Chalker, Mrs. Lynda
Heath, Rt Hon Edward


Channon, Rt. Hon. Paul
Heddle, John


Chapman, Sydney
Henderson, Barry


Clark, Hon A. (Plym'th, S'n)
Heseltine, Rt Hon Michael


Clark, Sir W. (Croydon S)
Hicks, Robert


Clarke, Kenneth (Rushcliffe)
Higgins, Rt Hon Terence L.


Clegg, Sir Walter
Holland, Philip (Carlton)


Colvin, Michael
Hooson, Tom


Cope, John
Hordern, Peter


Cormack, Patrick
Howell, Rt Hon D. (G'ldf'd)


Corrie, John
Howell, Ralph (N Norfolk)


Costain, Sir Albert
Hunt, David (Wirral)


Cranborne, Viscount
Hunt, John (Ravensbourne)


Critchley, Julian
Irving, Charles (Cheltenham)


Crouch, David
Jenkin, Rt Hon Patrick


Dickens, Geoffrey
Jessel, Toby


Dorrell, Stephen
Johnson Smith, Sir Geoffrey


Douglas-Hamilton, Lord J.
Jopling, Rt Hon Michael


Dover, Denshore
Joseph, Rt Hon Sir Keith


du Cann, Rt Hon Edward
Kellett-Bowman, Mrs Elaine





King, Rt Hon Tom
Ridsdale, Sir Julian


Kitson, Sir Timothy
Rifkind, Malcolm


Knight, Mrs Jill
Rippon, Rt Hon Geoffrey


Knox, David
Roberts, M. (Cardiff NW)


Lamont, Norman
Roberts, Wyn (Conway)


Lang, Ian
Rossi, Hugh


Latham, Michael
Rost, Peter


Lawrence, Ivan
Royle, Sir Anthony


Lawson, Rt Hon Nigel
Rumbold, Mrs A. C. R.


Lee, John
Sainsbury, Hon Timothy


Le Marchant, Spencer
St. John-Stevas, Rt Hon N.


Lennox-Boyd, Hon Mark
Shaw, Giles (Pudsey)


Lewis, Kenneth (Rutland)
Shaw, Sir Michael (Scarb')


Lloyd, Ian (Havant &amp; W'loo)
Shelton, William (Streatham)


Lloyd, Peter (Fareham)
Shepherd, Colin (Hereford)


Loveridge, John
Shepherd, Richard


Luce, Richard
Silvester, Fred


Lyell, Nicholas
Sims, Roger


McCrindle, Robert
Skeet, T. H. H.


Macfarlane, Neil
Smith, Dudley


MacKay, John (Argyll)
Smith, Tim (Beaconsfield)


Macmillan, Rt Hon M.
Speller, Tony


McNair-Wilson, M. (N'bury)
Spence, John


McNair-Wilson, P. (New F'st)
Spicer, Michael (S Worcs)


McQuarrie, Albert
Sproat, Iain


Madel, David
Squire, Robin


Major, John
Stainton, Keith


Marland, Paul
Stanbrook, Ivor


Marlow, Antony
Stanley, John


Marshall, Michael (Arundel)
Steen, Anthony


Mates, Michael
Stewart, A.(E Renfrewshire)


Mawby, Ray
Stewart, Ian (Hitchin)


Mawhinney, Dr Brian
Stokes, John


Mayhew, Patrick
Stradling Thomas, J.


Mellor, David
Tapsell, Peter


Meyer, Sir Anthony
Taylor, Teddy (S'end E)


Miller, Hal (B'grove)
Tebbit, Rt Hon Norman


Mills, Iain (Meriden)
Temple-Morris, Peter


Mills, Sir Peter (West Devon)
Thomas, Rt Hon Peter


Miscampbell, Norman
Thompson, Donald


Mitchell, David (Basingstoke)
Thorne, Neil (Ilford South)


Moate, Roger
Thornton, Malcolm


Monro, Sir Hector
Townend, John (Bridlington)


Montgomery, Fergus
Townsend, Cyril D, (B'heath)


Moore, John
Trippier, David


Morris, M. (N'hampton S)
Trotter, Neville


Morrison, Hon C. (Devizes)
van Straubenzee, Sir W.


Morrison, Hon P. (Chester)
Vaughan, Dr Gerard


Murphy, Christopher
Viggers, Peter


Myles, David
Waddington, David


Neale, Gerrard
Wakeham, John


Needham, Richard
Waldegrave, Hon William


Nelson, Anthony
Walker, Rt Hon P.(W'cester)


Neubert, Michael
Walker, B. (Perth )


Newton, Tony
Walker-Smith, Rt Hon Sir D.


Nott, Rt Hon John
Wall, Sir Patrick


Onslow, Cranley
Waller, Gary


Page, John (Harrow, West)
Walters, Dennis


Page, Richard (SW Herts)
Ward, John


Parris, Matthew
Warren, Kenneth


Patten, Christopher (Bath)
Watson, John


Pattie, Geoffrey
Wells, Bowen


Pawsey, James
Wells, John (Maidstone)


Percival, Sir Ian
Wheeler, John


Peyton, Rt Hon John
Whitney, Raymond


Pink, R. Bonner
Wiggin, Jerry


Pollock, Alexander
Wilkinson, John


Prentice, Rt Hon Reg
Williams, D.(Montgomery)


Price, Sir David (Eastleigh)
Winterton, Nicholas


Proctor, K. Harvey
Wolfson, Mark


Raison, Rt Hon Timothy
Young, Sir George (Acton)


Rathbone, Tim
Younger, Rt Hon George


Rees, Peter (Dover and Deal)



Rees-Davies, W. R.
Tellers for the Ayes:


Rhodes James, Robert
Mr. Anthony Berry and


Ridley, Hon Nicholas
Mr. Carol Mather.




NOES


Abse, Leo
Allaun, Frank


Adams, Allen
Anderson, Donald






Archer, Rt Hon Peter
Hardy, Peter


Ashton, Joe
Harman, Harriet (Peckham)


Atkinson, N.(H'gey,)
Harrison, Rt Hon Walter


Barnett, Rt Hon Joel (H'wd)
Hart, Rt Hon Dame Judith


Beith, A. J.
Hattersley, Rt Hon Roy


Benn, Rt Hon Tony
Haynes, Frank


Bennett, Andrew(St'kp't N)
Healey, Rt Hon Denis


Bidwell, Sydney
Heffer, Eric S.


Booth, Rt Hon Albert
Hogg, N. (E Dunb't'nshire)


Bottomley, Rt Hon A.(M'b'ro)
Holland, S. (L'b'th, Vauxh'll)


Bray, Dr Jeremy
Home Robertson, John


Brocklebank-Fowler, C.
Homewood, William


Brown, R. C. (N'castle W)
Hooley, Frank


Brown, Ronald W. (H'ckn'y S)
Howell, Rt Hon D.


Brown, Ron (E'burgh, Leith)
Howells, Geraint


Buchan, Norman
Hoyle, Douglas


Callaghan, Rt Hon J.
Huckfield, Les


Callaghan, Jim (Midd't'n &amp; P)
Hudson Davies, Gwilym E.


Campbell, Ian
Hughes, Mark (Durham)


Campbell-Savours, Dale
Hughes, Robert (Aberdeen N)


Canavan, Dennis
Hughes, Roy (Newport)


Cant, R. B.
Janner, Hon Greville


Carter-Jones, Lewis
Jay, Rt Hon Douglas


Cartwright, John
Jenkins, Rt Hon Roy (Hillh'd)


Clark, Dr David (S Shields)
Johnson, Walter (Derby S)


Clarke, Thomas (C'b'dge, A'rie)
Jones, Rt Hon Alec (Rh'dda)


Cocks, Rt Hon M. (B'stol S)
Jones, Barry (East Flint)


Cohen, Stanley
Jones, Dan (Burnley)


Concannon, Rt Hon J. D.
Kaufman, Rt Hon Gerald


Conlan, Bernard
Kilroy-Silk, Robert


Cook, Robin F.
Lambie, David


Craigen, J. M. (G'gow, M'hill)
Lamond, James


Crawshaw, Richard
Leadbitter, Ted


Cryer, Bob
Leighton, Ronald


Cunningham, Dr J. (W'h'n)
Lewis, Ron (Carlisle)


Dalyell, Tam
Litherland, Robert


Davidson, Arthur
Lofthouse, Geoffrey


Davies, Rt Hon Denzil (L'lli)
Lyon, Alexander (York)


Davis, Clinton (Hackney C)
Lyons, Edward (Bradf'd W)


Davis, Terry (B'ham, Stechf'd)
Mabon, Rt Hon Dr J. Dickson


Deakins, Eric
McDonald, Dr Oonagh


Dean, Joseph (Leeds West)
McGuire, Michael (Ince)


Dewar, Donald
McKay, Allen (Penistone)


Dixon, Donald
McKelvey, William


Dobson, Frank
Maclennan, Robert


Dormand, Jack
McMahon, Andrew


Douglas, Dick
McTaggart, Robert


Dubs, Alfred
McWilliam, John


Duffy, A. E. P.
Marks, Kenneth


Dunnett, Jack
Marshall, D(G'gow S'ton)


Dunwoody, Hon Mrs G.
Marshall, Dr Edmund (Goole)


Eadie, Alex
Marshall, Jim (Leicester S)


Eastham, Ken
Mason, Rt Hon Roy


Edwards, R. (W'hampt'n S E)
Maxton, John


Ellis, R. (NE D'bysh're)
Meacher, Michael


Ellis, Tom (Wrexham)
Mitchell, Austin (Grimsby)


English, Michael
Mitchell, R. C. (Soton Itchen)


Ennals, Rt Hon David
Morris, Rt Hon A. (W'shawe)


Evans, Ioan (Aberdare)
Morris, Rt Hon C. (O'shaw)


Evans, John (Newton)
Morris, Rt Hon J. (Aberavon)


Ewing, Harry
Morton, George


Faulds, Andrew
Moyle, Rt Hon Roland


Field, Frank
Mulley, Rt Hon Frederick


Fitch, Alan
Newens, Stanley


Flannery, Martin
Oakes, Rt Hon Gordon


Ford, Ben
Ogden, Eric


Forrester, John
O'Neill, Martin


Foulkes, George
Orme, Rt Hon Stanley


Fraser, J. (Lamb'th, N'w'd)
Owen, Rt Hon Dr David


Freeson, Rt Hon Reginald
Park, George


Freud, Clement
Parker, John


Garrett, John (Norwich S)
Parry, Robert


George, Bruce
Pavitt, Laurie


Gilbert, Rt Hon Dr John
Pendry, Tom


Golding, John
Penhaligon, David


Gourlay, Harry
Pitt, William Henry


Graham, Ted
Powell, Raymond (Ogmore)


Grant, John (Islington C)
Price, C. (Lewisham W)


Hamilton, James (Bothwell)
Race, Reg


Hamilton, W. W. (C'tral Fife)
Radice, Giles





Rees, Rt Hon M (Leeds S)
Summerskill, Hon Dr Shirley


Richardson, Jo
Taylor, Mrs Ann (Bolton W)


Roberts, Albert (Normanton)
Thomas, Dafydd (Merioneth)


Roberts, Allan (Bootle)
Thomas, Dr R.(Carmarthen)


Roberts, Ernest (Hackney N)
Thorne, Stan (Preston South)


Roberts, Gwilym (Cannock)
Tilley, John


Robertson, George
Tinn, James


Robinson, G. (Coventry NW)
Torney, Tom


Rooker, J. W.
Urwin, Rt Hon Tom


Roper, John
Varley, Rt Hon Eric G.


Ross, Ernest (Dundee West)
Wainwright, E.(Dearne V)


Ross, Stephen (Isle of Wight)
Walker, Rt Hon H.(D'caster)


Rowlands, Ted
Wardell, Gareth


Ryman, John
Wellbeloved, James


Sever, John
Welsh, Michael


Sheerman, Barry
White, Frank R.


Sheldon, Rt Hon R.
White, J. (G'gow Pollok)


Shore, Rt Hon Peter
Whitehead, Phillip


Short, Mrs Renée
Whitlock, William


Silkin, Rt Hon J. (Deptford)
Willey, Rt Hon Frederick


Silkin, Rt Hon S. C. (Dulwich)
Williams, Rt Hon A.(S'sea W)


Silverman, Julius
Williams,Rt Hon Mrs (Crosby)


Skinner, Dennis
Wilson, Gordon (Dundee E)


Smith, Cyril (Rochdale)
Wilson, Rt Hon Sir H.(H'ton)


Snape, Peter
Wilson, William (C'try SE)


Soley, Clive
Winnick, David


Spearing, Nigel
Woodall, Alec


Spellar, John Francis (B'ham)
Woolmer, Kenneth


Spriggs, Leslie
Wrigglesworth, Ian


Stallard, A. W.
Wright, Sheila


Stewart, Rt Hon D. (W Isles)
Young, David (Bolton E)


Stoddart, David



Stott, Roger
Tellers for the Noes:


Strang, Gavin
Mr. Lawrence Cunliffe and


Straw, Jack
Mr. Hugh McCartney.

Question accordingly agreed to.

Bill read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Motion relating to Ways and Means may be proceeded with, though opposed, until any hour.—[Mr. Garel-Jones.]

WATER [MONEY]

Queen's Recommendation having been signified—

Resolved,

That, for the purposes of any Act of the present Session to make provision as to the constitution and procedure of water authorities and their borrowing and other powers and as to arrangements for the carrying out of their sewerage functions; to enable water authorities and statutory water companies to provide advice and assistance outside the United Kingdom; to provide for the dissolution of the National Water Council and the Water Space Amenity Commission and to repeal section 25(1)(d) of the Local Government Act 1974 and the Water Charges Equalisation Act 1977, it is expedient to authorise—
(a) any increase in the sums payable out of or into the National Loans Fund or the Consolidated Fund attributable to provisions of the said Act increasing to £6,000 million, with power to increase by order to £7,500 million, the limit imposed by paragraph 34(5) of Schedule 3 to the Water Act 1973 in relation to borrowing by water authorities;
(b) the payment out of money provided by Parliament of—

(i) any sums required for making payments to statutory water undertakers under provisions of the said Act of the present Session enabling adjustments to be made in connection with the repeal of the Water Charges Equalisation Act 1977;
(ii) any expenses incurred by the Secretary of State in connection with the dissolution of the National Water Council and the Water Space Amenity Commission; and


(iii) any administrative expenses incurred by any government department in consequence of the provisions of the said Act of the present Session;

(c) payments into the Consolidated Fund.—[Mr. Garel-Jones.]

WAYS AND MEANS

WATER

Resolved,

That it is expedient to authorise the levying from water authorities—

(a) of such contributions as appear to the Secretary of State necessary to meet the expenses incurred by him in connection with the dissolution of the National Water Council and the Water Space Amenity Commission; and
(b) of amounts which are, in the opinion of the Secretary of State, appropriate in relation to the making of adjustments in equalisation levies and equalisation payments in connection with the repeal of the Water Charges Equalisation Act 1977.—[Mr. Garel-Jones.]

Orders of the Day — Public Passenger Vehicles

Mr. Roger Stott: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Devon Trial Area Order 1982 (S.I., 1982, No. 1243), dated 1st September 1982, a copy of which was laid before this house on 9th September, in the last Session of Parliament, be annulled.
I wish to deploy the arguments that my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) and others of my hon. Friends in the Shadow transport team have used for a number of years.
Not a week goes by without the Government attacking the fabric of our public transport system. The way that the Transport Bill was presented yesterday is a constitutional outrage. It seeks to impose Marsham Street views on local authorities. Metropolitan authorities in England will be forced substantially to increase bus fares. This evening we are discussing a statutory instrument to introduce a trial area in parts of Devon. Doubtless the Minister will say that the Devon county council applied to the Department of Transport for authority to introduce a trial area only in part of the county. That fact may be significant.
A hallmark of the Government is that they persistently try furtively to bring before the House controversial issues of varying importance. This matter is important and the Government have slipped it through in a statutory instrument. The order was originally made on 1 September and laid before Parliament on 9 September. It came into operation on 1 October. All the provisions came into operation before the House had had an opportunity to debate the statutory instrument. I am not an expert on procedure but I challenge the validity of the Government's putting into force the provisions of a statutory instrument before the House has had an opportunity to debate the issues.
The concept of a trial area may be attractive at first sight, but the proposal will be extremely damaging to the network of services operated by the National Bus Company and others.

Mr. Terence Higgins: The hon. Gentleman makes a serious accusation in saying that the order was brought before the House invalidly. Had that been so, the Chair would have objected.

Mr. Stott: I said nothing of the kind. I said that I was not an expert on procedure but I doubted the validity of the procedure. However, as the measure has been proceeded with, it must be valid.
The order was made on 1 September, laid before Parliament on 9 September and came into operation on 1 October when the House was not sitting, so we did not have an opportunity to debate the contents of the statutory instrument. It is yet another measure that has been slipped through the House furtively and put into operation without hon. Members having an opportunity to comment on it.
At face value, a trial area may seem attractive, but my hon. Friends and I disagree with the proposition because we believe that it could be very damaging. In the past, when transport operations wished to alter stage carriage routes or fares or to open new routes, they had to satisfy the local traffic commissioners that their plans were in the best interests of local public transport. The Transport Act 1981 circumvented that essential safeguard and curtailed the functions of the traffic commissioners by freeing from


licensing requirements all journeys other than local services. It also eliminated fares control and the licensing of conductors.
The Secretary of State for Transport may be aware of the example of Yeowarts in Cumbria. During a debate on the Transport Bill in 1981 the then Secretary of State claimed that the measures would improve local transport by broadening the parameters. When Yeowarts applied to run stage carriage services on routes operated by the local authority and the National Bus Company, both the local authority and the traffic commissioners objected. However, the company appealed to the Secretary of State, who overturned the objections and granted a licence. The local transport undertaking is now losing much valuable revenue on those profitable routes and some provincial services, notably in inner Lakeland have been withdrawn.
In addition, because of the chaos that was created by granting that licence, the then Under-Secretary of State decided to repair the damage of the Bill by giving the local authority a further tranche of transport supplementary grant. So profitable local routes could be privatised and the damage would be repaired with taxpayers money. The same may happen in this trial area.

Mr. D. N. Campbell-Savours: Does my hon. Friend also recall that about two years ago I was given assurances as I was sitting here by the then Under-Secretary that routes would not be lost in my constituency, but which were subsequently lost? Is he also aware that this morning I received yet another letter from Cumberland Motor Services expressing concern about further decisions that have been taken by Yeowarts to press ahead in seeking additional routes, and that the likelihood is that even more routes will be lost in my constituency? Is it not a disgrace that the Government can get away with that?

Sir Frederick Burden: Are we not going rather far from the provisions of the order?

Mr. Deputy Speaker (Mr. Bernard Weatherill): The hon. Gentleman pre-empts what I was going to say. It is perfectly legitimate to draw attention to that matter but not to deal with it in detail.

Mr. Stott: I was seeking to draw attention to the provisions in the Transport Act 1980 which allowed trial areas and delicensing and the consequences which flowed from them. The consequence of that legislation has been applications from several shire counties to introduce trial areas. It is not surprising that the applications so far received by the Department of Transport have come from shire county areas which have provided less than satisfactory services for their people. I know because I have spent the past three years examining shire county transportation policies and I stand here tonight unashamedly and say so.
This is the second trial area application to be debated by the House. My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), in his speech on 21 October 1981, succinctly deployed our arguments against the introduction of the trial area in Hereford and Worcester. While I cannot debate the principle of trial areas tonight, I would be in order to record some of the views of those major operators who must contend with trial areas, such as, the National Bus Company.

Mr. Robert Adley: The hon. Gentleman tells us that he has been studying these

matters. Can he say how many times in the past three years he has been to any of the areas in Devon, Hereford and Worcester?

Mr. Stott: I went to Hereford and Worcester on two occasions and I have been to Norfolk once. I have not been to Devon, but I am in close contact with people there and I studied the situation carefully before making my remarks to the House this evening.

Mr. Peter Snape: Does my hon. Friend agree with me that if the hon. Member for Christchurch and Lymington (Mr. Adley) had as much expertise on this as on all the matters on which he is quoted regularly in the daily newspapers, he would not have time to come to the House anyway?

Mr. Stott: My hon. Friend is continually sparring with the hon. Member for Christchurch and Lymington (Mr. Adley). Perhaps I may remain above that battle.
I was saying that it would be proper for me to deploy this evening some of the arguments that have been raised by the National Bus Company, whose subsidiary, Western National, submitted evidence to the Devon county council when it became apparent that it was seeking Government permission to carry out the experiment.
I have today secured a press release issued by the National Bus Company's subsidiary reported in the Exeter Express on 17 September. It says:
Western National today warned that it will be forced to scrap vital Exeter bus services if a private operator gets the go-ahead. Routes affecting hospital and industrial services must be axed to make up for an expected loss of more than £27,000.
The article ends:
The bus company is already running a deficit in the city centre services of £53,000 a year.
It is difficult to see how those counties that apply for trial area status could any longer enter into satisfactory agreements for the provision of services under revenue support arrangements, as the supported services would be open to the competitive creaming off of traffic on parts of routes or at certain selected times of day. As a result, counties would face increasing and unquantifiable revenue support demands if services were to be maintained at times that were unattractive to competing operators.
It would be difficult, if not impossible, to operate or sustain in trial areas the network of services that they are currently able to provide with the benefit of cross-subsidisation. By the threat of unregulated competition operators would be forced to concentrate on the more profitable operations, and the continuance of less profitable but socially necessary services—made possible by cross-subsidy—would have to cease to the detriment of the services and the passengers who depend on them.
That is the nub of our case. We have argued it consistently in all the transport debates of the past three years. The Government do not seem to understand that it is the value of network services that allows unprofitable routes to be maintained. The basis is that other, profitable, routes cross-subsidise the non-profitable routes, which can then remain in existence.
In evidence to Devon county council, one of the major operators of public transport in the area told the council's chief executive that
The Road Servicing Licensing system has enabled and indeed required network bus operators working in co-operation with the local authorities concerned to provide services in areas and at times of varying demand. The licensing system provided a safeguard against an operator seeking simply to provide services at the times most attractive to him.


Should this licensing system be removed it must be expected that operators will seek to exploit the services or journeys of maximum return without accepting an obligation to provide journeys which are less attractive financially. It is likely, therefore, that whilst in some places in the short term there may be apparent benefits, the implications for less populous areas and less popular days or times of day will be bleak unless services are supported from public funds. Services in the Trial Area would in all probability be without the benefit of cross-subsidy otherwise available on the network basis.
That reinforces the argument that we have consistently put forward about cross-subsidisation. Any interference, opening of the parameters or privatisation of those routes will affect the cross-subsidy and inevitably affect the loss-making routes of rural areas.

Mr. David Penhaligon: I understand the hon. Gentleman's argument, but if an area applied for trial status although there were no profitable bus routes, would the Labour Party's objection to such experiments fall to one side?

Mr. Stott: We would prefer public transport and the transport supplementary grant to be used properly. That is where we differ from the Conservative Party, which wishes to restrain the transport supplementary grant and to shackle public transport. It wants to change the nature of public transport by increasing fares.
There should be public transport provision throughout the United Kingdom. I refer the hon. Gentleman to the Labour Party's programme, which has been endorsed by the TUC and the National Executive of the Labour Party. We commit ourselves to the minimal service concept. It is a very good document. The hon. Gentleman comes from a rural area and he should read it, because it deals with the very point that he raised.
Simply because Devon county council has applied for a trial area experiment to come into operation does not mean that it has universal support. I am advised that on 24 September 1980 the transport policy committee of the said county council, comprising members who I imagine would specialise in transport interests, rejected the suggestion that a trial area should be introduced in that area on the basis that it would harm existing services and profitable routes. Unfortunately, the transport policy committee was over-ruled. Subsequently the full county council decided at its meeting to ask the Secretary of State for Transport to bring forward a statutory instrument to allow it to introduce a trial area.
Therefore, there must be at least some dubiety in the Tory ranks in Devon if the transport policy committee rejected the proposal, but the committee was over-ruled by the full county council. However, there is still opposition to the proposal from the people in the Devon area. I am advised that the Confederation of British Road Passenger Transport is opposed to the provision and that Exeter city council objects strongly to the proposal. It is not surprising that Exeter city council object because it would come off worst, and it knows that it would. That is why it is against it.
The Association of County Councils is opposed to the principle of trial areas. The National Bus Company's subsidiary, Western National, is opposed to the introduction of the trial area. The National Union of Railwaymen, contrary to common belief—I am advised by my hon. Friend the Member for West Bromwich, East

(Mr. Snape)—organises in the bus industry. If my hon. Friend catches your eye, Mr. Deputy Speaker, I have no doubt that he will elucidate that issue.
What are the results of such competition? There is bound to be creaming off of the more lucrative routes, possibly with a reduction in fares, but at the expense of the rural network, the services of which might suffer. We keep coming back to that point.
The promoters of the trial area lost the battle in the transport policy committee of the Devon county council on 24 September 1980. The only change so far is the exclusion of the Exeter city council area from the provisions. However, 4 million passenger journeys each year are still subject to the order. The bus depots at Exmouth and Sidmouth and about 80 jobs in the whole east and mid-Devon area could easily be put at risk—for what? All the social benefits claimed by the trial area promoters are available under current legislation. A trial area puts too much at risk for benefits that are already achievable. We do not have to go down that road.
Some people may argue that the only way to prove the failings of the trial area is to try it out. I do not subscribe to that view as I think that if we do so the damage would be far reaching and irreconcilable. My hon. Friend the Member for West Bromwich, East will allude to the points that were made by his union when it submitted its evidence to Devon county council. Some of its submissions should be taken seriously by the House. They were made in good faith and against a background of concern for the membership that works in the area.
I have some questions to ask the Minister. First, what guarantee has she received that, as a consequence of the introduction of the trial area, services in the rest of Devon will not suffer? Secondly, as there was a Dutch auction in Hereford and Worcester in respect of the transport supplementary grant, on what basis will she agree to allocate part of the county council's supplementary grant to private operators and private routes if they should submit applications?
The trial area concept may seem superficially attractive, but the Opposition believe that in practice it is the thin end of the wedge. It allows the shire counties to abrogate their responsibilities to run a proper public transport system in the way in which we believe that it should be run. It allows them to get away with network planning. Trial areas allow private operators to cream off profitable routes. The concept means in practice that private operators are no longer accountable to anyone, least of all to the traffic commissioners to which they were accountable hitherto. It is no substitute for a properly financed, well planned and soundly managed public transport policy. It is the principle of the trial area rather than the specific request that I shall be asking my right hon. and hon. Friends to vote against this evening. We are implacably opposed to it because of the damage that we feel that it will do.

Sir Peter Mills: I welcome the opportunity to speak in this important debate. The argument advanced by the hon. Member for Westhoughton (Mr. Stott) does not reflect his knowledge of the area with which we are dealing. It is strange that the Opposition should be praying against the order when to my knowledge there is not a Socialist Member representing a constituency in the South-West—

Mr. Snape: There are not many Tories in South Yorkshire.

Sir Peter Mills: —who knows the problems that we are experiencing in the transport system.
The hon. Member for Westhoughton talked about a "rural network of buses". That is a joke. He must learn a little more about the facts of life in the remote parts of Devon and Cornwall. He talked also about the concern of the National Union of Railwaymen. Did the NUR have any concern for my constituents in the rural areas when it was on strike, and, only recently, for those trying to get work on the few remaining railways in Devon? Of course it did not. It went on strike. And more than that, it damaged the future of the lines.

Mr. Stott: The NUR had a strike that lasted for two days. The industrial action that was taken on the railways was not taken primarily by the NUR. It was taken by another railway union. I was referring specifically to the NUR. I hope that the hon. Gentleman will remember that if he chooses to make similar accusations in future.

Sir Peter Mills: I accept that, but I am sure that the hon. Gentleman was referring to ASLEF as well as to the NUR, and the combined action of the two has had a devastating effect on the future of the railways in the South-West.
I am sure that my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), whose area is involved, would have liked to be present at this debate. [HON. MEMBERS: "Where is he?"] Unfortunately, he is away on an important trip with a Select Committee.

Mr. Snape: I bet it is not a bus trip.

Sir Peter Mills: As I am a constituent of my hon. Friend's, perhaps I may make a few pertinent remarks.
I welcome the trial proposal as a worthy way to try to help with the difficult problem of rural transport in remote areas. Many other ideas have been tried without much success. It is all very well for Labour Members to condemn the proposal, but what did they do? I have a long memory and I remember many years of Socialist rule. The problem was just as bad then. My hon. Friend the Minister has made a worthy effort in supporting Devon county council in this way, and it is certainly worth trying to get the experiment under way.
My only criticism is that the wrong area has been chosen. [Interruption.] I am trying to be frank, which is more than one can say of the Opposition at times. I must declare an interest, as West Devon is probably the remotest of all areas in Devon.

Mr. Tony Speller: After North Devon.

Sir Peter Mills: With North Devon. Therefore, I believe that the trial area should have been in North or West Devon. The area that has been chosen has more railway lines than we have. It also has better bus services in some places, so there may be some danger there. That is why this needs to be an experiment, to see whether it works. There are also more and better roads than there are in the remoter areas of North and West Devon. That is why I believe that the wrong area has been chosen. Perhaps the Minister will comment on that. The area that I have the privilege of representing has virtually no railways, very difficult roads and smaller villages with, it seems, more retired people and others who need this type of transport.

This is a real and growing problem, and it will continue to grow unless something is done, so the experiment is well worth trying.
Perhaps I may try to educate the Opposition on this. It is true that there are more cars in the remoter areas, but this leaves a hard core of people who cannot afford a car, retired people and so on, and who need bus transport into the towns and perhaps into the cities of Plymouth and Exeter. Many of the existing bus operators make their bread and butter living from school transport. I believe that they would be very suitable operators to provide a service for the village people. After the children have been taken to school, a service could be fitted in with the times at which the village people want a service into the towns or cities to do their shopping, and so on. At present, those operators cannot undertake such a service, so most of their services run at a loss. If they were given the freedom to run these additional services they could help to solve the problem and also win back many people who would prefer to go into the cities or the towns by bus rather than using their cars. If the times were fitted in correctly, such a service could be much more flexible than the present situation.

Mr. Albert Booth: Did the hon. Gentleman ask the Devon county council to include his constituency in the trial area order? If not, why not? If so, why did the council refuse his request?

Sir Peter Mills: The council did not refuse my request. It used the same area for the trial of Post Office vans. It has always been the experimental area. I hope that the trial will be a success and will move to my constituency.
Perhaps the Minister could pay attention to the types of buses used in the experiment. Usually, village buses that transport children to school are second-hand, rather large, and not suitable for the purpose. It is a great pity that there is not enough profitability in school bussing for operators to buy smaller buses of smaller capacity that are easy to operate in difficult conditions in remote areas.
The experiment can be criticised. It might not work, but at least it is a start. The Socialists did not even attempt an experiment. It is a bold experiment—let us try it and see if it works. It can then move to other areas, especially West and North Devon. I fully support it, even with its warts and possible problems.

Several Hon. Members: rose—

Mr. Deputy Speaker (Mr. Paul Dean): Order. The debate must end at 11.30 pm. A number of hon. Members wish to speak, so I hope that speeches will be brief.

Mr. Peter Snape: I shall bear your strictures in mind, Mr. Deputy Speaker. Before being challenged about the lack of Devon burr in my voice, I declare an interest as a member of the National Union of Railwaymen. Many of the bus services in Devon are operated by members of the National Union of Road Operatives, which is a subsidiary of my union.
The only two occasions since I was elected to the House when I have visited Devon were during two annual holidays some years ago. I do not profess to be an expert on its local traffic problems. The arguments that I shall deploy come exclusively from Devon, and the House will


have to accept that I am merely the voice not only of members of the NUR but of others from that part of the world.
The concept of trial areas resulted from the Transport Act 1980. That Act had three main prongs—the concept of car-sharing, the increase in the number of those allowed to operate long-distance coach services and trial areas. It would be improper for me to refer to the first two prongs of the legislation, other than to say that it is widely accepted that both car sharing and the whole nonsense of competition from private long-distance coach hauliers have proved to be damp squibs.
The Devon county council was the first to plunge in with an application for a trial area, not long after the Act came into force. It then discovered to its horror that most of the district councils in the county opposed the concept of trial areas. My hon. Friend the Member for Westhoughton (Mr. Stott) mentioned Exeter city council in his able speech. It is Tory-controlled, of course. One hates to see public brawls between members of the Conservative Party but they happen occasionally. It certainly happened on this occasion. Exeter city council felt that trial areas in that part of the county would have a strongly adverse effect on the services that it was operating.
The hon. Member for Truro (Mr. Penhaligon) intervened to say that there were no profitable bus services in Devon and Cornwall anyway. That statement was greeted with jeers from Conservative Members. Exeter city services operate under a remit to break even. That shows that some services in the city must make money to subsidise those that do not.
In early 1981, the Secretary of State for Social Services, then Secretary of State for Transport, visited Devon and Cornwall. One could argue that his knowledge of that part of the world is as sketchy as mine. Nevertheless, he visited the area to persuade Devon county council to take up the offer. Having made its initial application, it appeared to want to back away. He did more than attempt to persuade the council—he offered the not inconsiderable sum of £500,000 if it would participate in the scheme. Whether it was due to his visit or to his inducement—I hesitate to call it a bribe, because that would be improper—to Devon county council I do not know, but on the Minister's return to London, the council threw out the whole scheme and decided that it wanted nothing to do with it. It was only when that not-so-subtle arm-twisting took place in the hallowed portals of county hall in Devon that the transportation committee's decision was hurriedly reversed and the application that we are discussing was made.
The NUR will be accused of taking a dog in a manger attitude and of being interested only in protecting jobs, regardless of public need in the area. I hope to show that that is not so by reading from a letter written to all Devon county councillors this year by the divisional organiser of the NUR, Mr. Viv Taylor. His area covers division 10 in union parlance which is the Exeter area. He said that
The employees of Western National are only too happy to participate in and assist with Experimental Areas.
Those are the areas that the hon. Member for Devon, West (Sir P. Mills) referred to a moment ago, inadvertently or otherwise. Mr. Taylor continued:

The new mini-bus proposals at Beer and Whimple and at Tiverton in the evenings are very worthwhile experiments and we hope they are successful. Social experiments like this are well worth trying out.
We are also happy about other operators runningover routes and to places we do not currently serve. What may not be generally known is the fact that any operator can provide such services with a Section 34 licence without the need for court appearances and the like. Such operators come in and even use our bus station—and they are welcome to.
That is hardly a dog in the manger attitude.
Moreover, Mr. Taylor refutes an argument that was advanced by the hon. Member for Devon, West when he writes:
Some people argue that the only way to prove the failings of the 'Trial Area' is to try it out.
That is virtually identical to what the hon. Gentleman said. The letter continues:
The damage done to the service network will then be beyond repair. Surely, you"—
the county councillors—
will not allow this to happen.
Sadly, it seems that the county councillors are prepared to let that happen. Why that area? Why allow a trial area when the services provided will compete with those provided by Exeter city council which was one of the bodies that objected to the concept?
Perhaps we should examine the glossy blurb that Devon county council has produced, no doubt at great cost to the taxpayers. I trust that not too many businesses have gone bust as a result of this exercise. The leaflet is entitled, "The Trial Area Explained". Under the heading, "Why does Devon want one?", the Tory-controlled county council says:
Despite paying out large amounts of subsidy the County Council has had to accept cuts in service level as passengers steadily drift away, deterred by rising fares".
This is a Tory-controlled authority telling the Secretary of State that its services are declining because it is forced by the Government to put up fares. I wish that I had been in possession of this document for yesterday's debate on the Transport Bill. I would have been able to quote it, although, given the standard of the Government's opening and closing speeches, I doubt if it would have made much difference. What about the attitude to the hallowed Tory principle of competition?

Mr. Adley: Before the hon. Gentleman gives his sob story about attitudes, can he justify the action of his union, the National Union of Railwaymen, just up the road at the West Somerset railway where it has refused for 20 years to allow a private railway to run into Taunton and has thus prevented the legitimate transport aspirations of many people in that area from being fulfilled?

Mr. Snape: It is difficult to reply directly to the hon. Gentleman, who always speaks in the extravagant language in which he is quoted in the newspapers. The problems of the railway line to which he refers are not covered under the order. I might be ruled out of order if I took the trouble to answer the hon. Gentleman. The intention is to protect bus services, but I have no wish, Mr. Deputy Speaker, to arouse your ire by saying more.
On 17 September 1982, before the traffic commissioners for the Western traffic area, an application was made to run two bus services by an operator not a million miles away from Devon and close to the trial area designated under the order. The operator, Mr. R. M. Holladay, and his wife proposed a one-man-bus operation. Among the objectors was Mr. A. T. W. Davies who


appeared on behalf of Devon county council. In his extremely relevant evidence, Mr. Davies said that there were a number of points that he wished to put to the commissioners in the hope that they would refuse the application. Mr. Davies said:
We have a concern about the level of resources available to the applicant"—
Mr. Holladay—
to maintain the service if granted.
There is some difficulty, if the concept of trial areas is accepted, in knowing the sort of operators who will run the services. Will they be one-man-bus people? Worthy though his application may have been, Mr. Holladay did not wish to run the bus on a Wednesday afternoon because that was the day on which he maintained it. It seems a sketchy principle, to say the least, if this is the sort of applicant who comes forward.
Mr. Davies, on behalf of the Devon county council, added:
It therefore appears that while some areas of the city"—
Exeter—
would enjoy a bus service they do not have at the moment, there is a serious danger that this marginal increase or improvement in service would be more than offset by a loss of benefit from the decrease in service which you have heard Western National"—
another objector—
are at least contemplating if the application is granted.
The myth of competition in Exeter has already been rejected by Devon county council as recently as September this year. It is opposed by my union not because of any dog in the manger attitude but because of the belief that it will have a serious impact on services in that part of the county. I hope that Conservative Members will accept that what I say is based on evidence from that part of the world. I have stated it because I believe it. I hope Conservative Members will join my hon. Friends and myself in the Lobby tonight to protect bus services in their constituencies.

Mr. Tony Speller: I start by paying what might be a surprising tribute. Members of the National Union of Railwaymen man most of the buses in my part of Devon. They work hard and well, and co-operate with their authority to try to provide the non-existent new network referred to by my hon. Friend the Member for Devon, West (Sir P. Mills). It is pointless to pretend that there is an existing rural network in the West Country. There are towns with one bus a day and large villages with one bus a week. The hon. Member for Westhoughton (Mr. Stott) confuses himself if he believes, in his urban fastness, that there is any form of public service transport in areas such as Devon.
Therefore, any trial area is worth a trial. We may be debating an order called the Devon Trial Area Order, but we are asking ourselves whether there is any future for public service buses in rural areas. I am sad at, and tired of, seeing a bus with one passenger and a driver. We must accept that a change must come. It is no good the hon. Member for West Bromwich, East (Mr. Snape) talking of the excellence of his union workers, excellent as they are, when they are driving uneconomic services that, sooner or later, are bound to lose their subsidy.
Any trial that aims at keeping people on buses rather than forcing them into cars—we are talking about an area where there are no trains—must be sensible. It is not dog

in the manger, but dead dog in the manger to suggest keeping the existing order and hope to keep it going for one, two or three years.
The redundancies accepted by the NUR over the years show that it realises the problem. I give every good wish to this trial area. Like my hon. Friend the Member for Devon, West, I should have liked it to come forward a little, as Chawleigh is in it, but Chulmleigh is out. I should have liked a bigger trial area. However, if we have no trial, we shall have no verdict, and if we have no verdict, sooner or later we shall have no bus service.

Mr. David Penhaligon: I agree with much that was said by the hon. Member for Devon, West (Sir P. Mills). This is the wrong trial area. I must confess to the cardinal sin of all time as a Cornishman commenting on the affairs of Devon. If I came from anywhere else in England, it would probably be all right, but for a Cornishman to talk about Devon is pushing his luck.
I wish to address myself to hon. Members on the Opposition Benches. I enjoy and appreciate their enthusiasm for providing some sort of social service in rural areas for the elderly, those who can no longer afford to drive, and children. I concur with their spirit and understand and appreciate it. However, things are so bad in some of the rural areas that they are worse than many hon. Members recognise and realise.
Looking at the map of this part of Devon, I can imagine that there is some sort of service operating around Tiverton, which is a substantial town. In the rural areas to the north of this trial area, the chances are that there are very few buses. Those that do run probably operate the same game that we play in Cornwall—spot the passenger. I have reluctantly reached the conclusion that we ought to be even more adventurous in our experiments than simply employing devices such as trial areas.
In parts of Cornwall, which I know rather better than this part of the country, there is a subsidised taxi service. It takes people from their homes to the shops where they want to go and, most important, takes them back with their shopping. It may be more credible financially and no more expensive than running a bus service, and it may provide a better service for the elderly.
The present position is not acceptable. All the trends are towards deterioration. I know that there is opposition to the trial area, but it is opposition based on desperation. The people can see that they have so very little going for them that they express the fear that the trial area will lead to no service at all. Often if one talks to the people concerned, one finds that they are convinced that what remnants of a service that they have run by the Western National bus company will disappear in the next four or five years, even if there is not a trial area, as the losses mount and mount.
The House could do itself a substantial service if it concentrated some of its time, abilities and energies on looking, in some depth into the often heart-rending transport difficulties that exist in some of the more remote rural areas.
The simple truth is that many people living in this part of the country now have a worse public transport system than any that has existed at any time in the last 100 years. As my dear grandmother used to say "At least in my young days we had the horse and cart. It was not very fast, but it was regular and reliable". Many areas no longer have even that.


I am against the order because I believe that it has been applied to the wrong area. It should have been applied to one of the remoter areas of Devon so that we could properly judge its effect.

Mr. Campbell-Savours: If that is the case, why did the Liberal Party vote for the Hereford and Worcestershire order about 12 months ago?

Mr. Penhaligon: To my knowledge, Tiverton is not in Worcester. The hon. Gentleman can make party points if he wishes. It does not matter what points the Labour Party makes in my part of the country, because I know both of the remaining Labour Party Members in my constituency. He is fighting an uphill battle in that regard.
People of a radical political persuasion are only too well aware of just how bad the situation now is. If the Liberals in Hereford and Worcester concluded that an experiment such as this might improve things in their area, I am willing to abide by their judgment.
The south coast of the Devon trial area is not typical of the remoter, rural, and less densely populated areas with which I and Devon Members are familiar. Even if this trial is successful in the southern part of the area, it will not prove to be a solution for the difficulties facing the remoter parts of the country.
We must be far more adventurous than the Government. The Liberal Party supported much of the primary legislation on which the order is based. We must consider the possibility of applying the bus subsidy to taxis, because it would be interesting to see what emerged from such an arrangement.

Mr. Colin Shepherd: I am grateful for this brief opportunity to inform the House of the consequences so far of the trial experiment in Hereford, which has now been going on for a year. It is only right that Devon should know what has happened in Hereford.
This is best summed up in a letter to the Hereford Times on 28 May from the general manager of Primrose Motors, a local bus company. I know that the Hereford Times is not top of the reading list of the hon. Member for Westhoughton (Mr. Stott). Nevertheless he may be interested in the letter. It states:
In your May 21 issue you reported that a local Transport Workers delegation stated that the 'free for all' on bus routes in Herefordshire was already causing problems for passengers and that 'all some of these private operators want to do is to take the cream off the top'. While agreeing that there may be possibly one or two operators who fit the description, I would like to reply that most independent operators have served the sparse population at a cost to themselves because of a sense of service to their local clientele. We at Primrose, have served the Leominster area over the last 60 years at a price and service frequency that I am sure no national subsidiary would attempt to maintain. Because of the `free for all' we at last have a chance to challenge the previous State monopoly on busier routes and bring the benefits of competition to the remaining long suffering passengers; on these busier routes if our fares are economically correct but not more than the public is prepared to pay, if our service is reliable, and if our drivers are pleasant in their attitude, then we deserve to make a small profit. If we get it wrong, we deserve to go out of business. If however, there are not enough potential passengers living on the route to maintain a profitable bus service, but there is a social need, then the Council is expected to pay for this social requirement. The ratepayers then deserve to get the most efficient service at the least cost to themselves. On rural routes this option is rarely provided by the nationalised transport concern with its

artificially high cost partly caused by restrictive trade union agreement and excessive number of headquarters staff etc. Having worked sixteen years with London Transport both as driver—6 years—and in the office, I am convinced, like the Transport Workers delegation, that there is a need for a 'comprehensive public transport system', but this need can be met in rural areas such as we live in by a co-ordinated service of independent operators—it does not have to be a State monopoly. Specific benefits provided by Primrose Motors to public transport users in the Hereford-Leominster-Ludlow area since the 'free for all' have included lower fares and increased services, including the introduction of Sunday services linking Hereford with Leominster, Presteigne and the black and white villages of Pembridge and Eardisland, for no more than 50 pence single fare. We intend to restore the faith in local public transport that has been eroded by years of nationalised neglect.
That was pretty fighting stuff and it was written in May. Today I asked the gentleman who wrote that if he had any wish to modify anything that he had written and he said "No, Sir" without reservation.

Mr. Les Huckfield: Touching his forelock.

Mr. Shepherd: He does not have to touch his forelock to me. After an experiment that has run for a year, Herefordshire has routes and services in town and country where Midland Red and Red and White were not able to operate before. We have routes in the country that did not exist before. We have restructured routes in the city of Hereford—I am disappointed that the city of Exeter is not taking up the idea—which are more in keeping with what people want. We have fare reductions and drivers and conductors in the nationalised industry being nice to people for the first time, and that is remarked upon in Hereford. That is important. Buses are attractive. When the experiment started I said that it needed watching, but it is well under way now and Devon need not be afraid.

The Under-Secretary of State for Transport (Mrs. Lynda Chalker): There is nothing furtive about the order. The hon. Member for Westhoughton (Mr. Stott) knows full well that every Government have brought forward orders, and prayers have then been tabled at the beginning of the new Session for the annulment of those orders and they have been debated as early as possible.
The prayer against the order for the Devon trial area tonight gives me an opportunity to put a number of facts before the House about the working of the trial area legislation and to answer the questions that have been asked.
The House will recall that the Transport Act 1980 was inspired by a desire to respond in a more flexible way to transport needs. What better identification could we have had than the speech by my hon. Friend the Member for Hereford (Mr. Shepherd)?
During those debates Opposition Members expressed many fears. Some have been repeated tonight. The debate tonight is significantly different. We have now the actual experience of two trial areas on which to base our judgments—not assertions and hypotheses.
The Government's purpose in providing for the designation of trial areas was to give counties the option of seeing whether, in their areas, the 50-year-old system of road service licensing might have outlived its usefulness. Opposition Members, with the exception of the hon. Member for Truro (Mr. Penhaligon), alleged that those areas would be overrun immediately by "cowboys"


and that "pirates" would rush in to cream off revenue from the most lucrative routes. In that atmosphere of cut-throat competition, marginally profitable or non-profitable routes would be shed and services would decline abruptly. They said that there would be a transport desert. That is what they alleged.
What has actually happened? In Norfolk there has been no destruction of public transport by unscrupulous private operators, as was so gloomily prophesied, but there has been no dramatic upsurge of the new services that we hoped to see.
The opportunity remains for operators to begin or revise services where they see the need. I was asked about Cumbria. I should be out of order if I went into that in detail, but the accusation by the hon. Member for Westhoughton that a special transport supplementary grant was paid to Cumbria because of Yeowarts is nonsense. Cumbria was going to talk to my predecessor after the intervention by the hon. Member for Workington (Mr. Campbell-Savours) but it never took up the offer, and went to court. That is where it is still. With that we leave Cumbria's experience this evening.
The position in Hereford and Worcester, about which my hon. Friend the Member for Hereford has so ably spoken, has been different from what was prophesied. As in Norfolk, there is no sign of the predicted collapse of public transport. What is different there is the county council's active approach to the trial area. It has taken the opportunity to revise the arrangements by which it pays revenue support to stage carriage operators.
Hereford and Worcester has instituted a system of tendering for contracts to run subsidised services. That arrangement was criticised by people who at that time feared unfettered competition. Now they have shifted their ground to protest at the greater control being exercised by the county council. They cannot have it both ways.
It was said that control contradicted the underlying concept of trial areas as zones of unrestricted entrepreneurial competition, but it was the Opposition, not the Government, who saw that as the inevitable outcome in trial areas. The Government simply said that we could give counties the opportunity to remove road service licensing where they thought it appropriate. There is nothing wrong with the way in which Hereford and Worcester has used the opportunity in an attempt to obtain cheaper and more efficient public transport.
The public sector operator declined to tender for subsidised services and withdrew from a number of services in the area. That was its decision. It had the freedom to tender. As a result of open tendering 19 services changed hands and nearly all the services abandoned by Midland Red were taken over by independent operators. The public sector operator did not try because it could not compete. The exceptions were three evening or Sunday services for which there was hardly any demand and which would probably have been discontinued in any case.
On many of the new services lower fares are being charged and the operator is in receipt of less revenue support. The net result has been a benefit to travellers and ratepayers. It is against that background that the debate takes place.
The hon. Member for Westhoughton asked about cross-subsidisation, which is at the root of all the arguments about licensing and trial areas. But for its traditional importance in sustaining the network, road service

licensing would have been abolished in 1980. Cross-subsidisation has recently been blessed by the Monopolies and Mergers Commission and by the Select Committee on Scottish Affairs, but it is not unchallenged. It means charging more to passengers on better used routes to help those on more lightly used routes. That may be socially regressive and against the operator's long-term best interests. We are not against the subsidy but we wish the best possible service to be offered. We shall use all the means at our disposal to bring transport to such areas as the hon. Member for Truro mentioned.
My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) very much wanted to be here, but he has advised me about his area of Devon. He is with the Select Committee on Industry and Trade in the Far East. I know that he will read the Official Report with great interest. I am also grateful to my hon. Friends the Members for Devon, West (Sir P. Mills) and for Devon, North (Mr. Speller) for welcoming the trial order.
We should give Devon a chance to operate the system. It is too early to report on experiences. The leaflets that the county council has issued publicising the trial area have been well received. I hope that operators in the area will respond to the opportunity by starting new services of benefit to the community. That will give us new insight into the role of road service licensing.
The county council has also made use of other powers in the Public Passenger Vehicles Act 1981 under which taxis can be shared. Two schemes in Beer and Whimple have already been started. The hon. Member for Truro mentioned the need for similar services in other areas. We shall welcome suggestions from any county council for trial areas to bring transportation for the first time to people who have no other means to get about.
The hon. Members for Westhoughton and West Bromwich, East (Mr. Snape) both mentioned the Exeter private operator. Mr. Holladay's application is still before the traffic commissioners, but it is important to realise that he does not operate in the trial area and that an appeal is possible if the traffic commissioners decide against him.
It was said that the Association of County Councils opposes the provision for Devon. That is not true. The association is prepared to have trial areas, because it knows the benefits of new transportation in areas that, as my hon. Friends the Members for Devon, North and Devon, West said, have no other means of transport and that have been without transport for a long time.
The hon. Member for West Bromwich, East also commented upon the transport supplementary grant. He knows that bids can be entered, but that does not mean that they will be granted. No decisions have been made for this year. Councils are providing for unforeseen events. The past bids by Norfolk and by Hereford and Worcester tried to provide for future difficulties, and neither authority has had to use that provision.
The purpose of the trial areas is to allow counties the opportunity to see how public transport can be improved in the absence of road service licensing. They are trials, and we have learnt that, above all, we should not prejudge their outcome. We have seen different results from the two areas previously designated, with no sign of the dire consequences that some people forecast. I have no reason to believe that the forecasts made in the House tonight will be more true in Devon than they were in the other trial areas. Indeed, I am confident that the county council is not prepared to allow that to happen. I expect the third trial


area to provide new and illuminating findings, to be of benefit to the local community and to contribute to our wider understanding of the role of road service licensing.
Devon county council has taken a long look forward. This is an innovatory approach to the improvement of passenger transport in that county. The council has been involved actively in Rutex experiments and has tested the operation of shared taxis in the experimental area. I am pleased that it has followed the trail that it blazed, which is why Devon is the third trial county. It is for Devon county council and not the Government to decide which operators it should support and for what period. The transport supplementary grant is the way in which the Exchequer's money may be channelled to the county councils, and the councils must ensure that it is spent in the best way. I am confident that Devon county council will do that.
Since the proposals for the Devon trial area were published, there have been only five objections and the county council has restricted the area to that which will be of benefit to the travelling public. The council has ensured that the areas to be served are those that are much in need of new services and where the existing services were reduced long ago. The council is in favour of a trial area so that improvements can be made.
The Government are anxious to promote innovation, and experiments in transport, whether they be urban or rural, can do that. We do not believe that the protection of the conventional bus services by licensing, appropriate perhaps before the war, is to be clung to slavishly now. We know from East Sussex that by supporting experiments in the co-ordination and brokerage of social services, education, health and public transport, a great improvement has come about. We want to see more experiments and more post buses and we welcome the National Bus Company's recent leaflet on community buses and its flexibus experiment in the Potteries. It is in the spirit of innovation and renewal that we are happy to support Devon county council in this venture.
In the light of what I have said tonight I hope that the Opposition will see fit to withdraw their prayer. If they do not, I have no hesitation in calling upon the House to reject it.

Question put:—

The Houses divided: Ayes 185, Noes, 271.

Division No. 10]
[11.30 pm


AYES


Abse, Leo
Carter-Jones, Lewis


Allaun, Frank
Clark, Dr David (S Shields)


Anderson, Donald
Clarke,Thomas(C'b'dge, A'rie)


Archer, Rt Hon Peter
Cocks, Rt Hon M. (B'stol S)


Ashton, Joe
Cohen, Stanley


Atkinson, N.(H'gey,)
Concannon, Rt Hon J. D.


Barnett, Rt Hon Joel (H'wd)
Conlan, Bernard


Benn, Rt Hon Tony
Cook, Robin F.


Bennett, Andrew(St'kp't N)
Craigen, J. M.(G'gow, M'hill)


Booth, Rt Hon Albert
Cryer, Bob


Bray, Dr Jeremy
Cunliffe, Lawrence


Brown, R. C. (N'castle W)
Cunningham, Dr J. (W'h'n)


Brown, Ron (E'burgh, Leith)
Dalyell, Tam


Buchan, Norman
Davidson, Arthur


Callaghan, Jim (Midd't'n &amp; P)
Davies, Rt Hon Denzil (L'lli)


Campbell, Ian
Davis, Clinton (Hackney C)


Campbell-Savours, Dale
Davis, Terry (B'ham, Stechf'd)


Canavan, Dennis
Deakins, Eric


Cant, R. B.
Dean, Joseph (Leeds West)





Dewar, Donald
Maxton, John


Dixon, Donald
Meacher, Michael


Dobson, Frank
Mitchell, Austin (Grimsby)


Dormand, Jack
Morris, Rt Hon A. (W'shawe)


Douglas, Dick
Morris, Rt Hon C. (O'shaw)


Dubs, Alfred
Morris, Rt Hon J. (Aberavon)


Duffy, A. E. P.
Moyle, Rt Hon Roland


Dunnett, Jack
Mulley, Rt Hon Frederick


Dunwoody, Hon Mrs G.
Newens, Stanley


Eadie, Alex
Oakes, Rt Hon Gordon


Eastham, Ken
O'Neill, Martin


Edwards, R. (W'hampt'n S E)
Park, George


Ellis, R. (NE D'bysh're)
Parry, Robert


English, Michael
Pavitt, Laurie


Ennals, Rt Hon David
Pendry, Tom


Evans, Ioan (Aberdare)
Powell, Raymond (Ogmore)


Evans, John (Newton)
Race, Reg


Ewing, Harry
Radice, Giles


Faulds, Andrew
Rees, Rt Hon M (Leeds S)


Field, Frank
Richardson, Jo


Flannery, Martin
Roberts, Albert (Normanton)


Ford, Ben
Roberts, Allan (Bootle)


Forrester, John
Roberts, Ernest (Hackney N)


Foulkes, George
Roberts, Gwilym (Cannock)


Fraser, J. (Lamb'th, N'w'd)
Robertson, George


Freeson, Rt Hon Reginald
Robinson, G. (Coventry NW)


Garrett, John (Norwich S)
Rooker, J. W.


Garrett, W. E. (Wallsend)
Ross, Ernest (Dundee West)


Gilbert, Rt Hon Dr John
Rowlands, Ted


Golding, John
Ryman, John


Gourlay, Harry
Sever, John


Graham, Ted
Sheerman, Barry


Hamilton, James (Bothwell)
Sheldon, Rt Hon R.


Hamilton, W. W. (C'tral Fife)
Shore, Rt Hon Peter


Hardy, Peter
Short, Mrs Renée


Harman, Harriet (Peckham)
Silkin, Rt Hon S. C. (Dulwich)


Harrison, Rt Hon Walter
Skinner, Dennis


Hattersley, Rt Hon Roy
Snape, Peter


Haynes, Frank
Soley, Clive


Heffer, Eric S.
Spearing, Nigel


Hogg, N. (E Dunb't'nshire)
Spellar, John Francis (B'ham)


Holland, S. (L'b'th, Vauxh'll)
Spriggs, Leslie


Home Robertson, John
Stallard, A. W.


Homewood, William
Stoddart, David


Hooley, Frank
Stott, Roger


Howell, Rt Hon D.
Strang, Gavin


Hoyle, Douglas
Straw, Jack


Huckfield, Les
Summerskill, Hon Dr Shirley


Hughes, Robert (Aberdeen N)
Taylor, Mrs Ann (Bolton W)


Hughes, Roy (Newport)
Thomas, Dr R.(Carmarthen)


Janner, Hon Greville
Thorne, Stan (Preston South)


Jay, Rt Hon Douglas
Tilley, John


Jones, Rt Hon Alec (Rh'dda)
Tinn, James


Jones, Barry (East Flint)
Torney, Tom


Jones, Dan (Burnley)
Urwin, Rt Hon Tom


Kaufman, Rt Hon Gerald
Varley, Rt Hon Eric G.


Kilroy-Silk, Robert
Wainwright, E.(Dearne V)


Lambie, David
Walker, Rt Hon H.(D'caster)


Lamond, James
Wardell, Gareth


Leadbitter, Ted
Welsh, Michael


Leighton, Ronald
White, Frank R.


Lewis, Ron (Carlisle)
White, J. (G'gow Pollok)


Litherland, Robert
Whitehead, Phillip


Lofthouse, Geoffrey
Whitlock, William


Lyon, Alexander (York)
Williams, Rt Hon A.(S'sea W)


McCartney, Hugh
Wilson, William (C'try SE)


McDonald, Dr Oonagh
Winnick, David


McGuire, Michael (Ince)
Woodall, Alec


McKelvey, William
Woolmer, Kenneth


McMahon, Andrew
Wright, Sheila


McTaggart, Robert
Young, David (Bolton E)


McWilliam, John



Marshall, D(G'gow S'ton)
Tellers for the Ayes:


Marshall, Dr Edmund (Goole)
Mr. George Morton and


Marshall, Jim (Leicester S)
Mr. Allen McKay.


Mason, Rt Hon Roy





NOES


Adley, Robert
Alexander, Richard


Aitken, Jonathan
Alison, Rt Hon Michael






Alton, David
Fowler, Rt Hon Norman


Amery, Rt Hon Julian
Fox, Marcus


Ancram, Michael
Fraser, Rt Hon Sir Hugh


Arnold, Tom
Fraser, Peter (South Angus)


Aspinwall, Jack
Freud, Clement


Atkinson, David (B'm'th,E)
Gardiner, George (Reigate)


Baker, Kenneth(St.M'bone)
Gardner, Edward (S Fylde)


Baker, Nicholas (N Dorset)
Garel-Jones, Tristan


Banks, Robert
Gilmour, Rt Hon Sir Ian


Beaumont-Dark, Anthony
Glyn, Dr Alan


Beith, A. J.
Goodhart, Sir Philip


Bendall, Vivian
Goodhew, Sir Victor


Bennett, Sir Frederic (T'bay)
Goodlad, Alastair


Benyon, Thomas (A'don)
Gorst, John


Benyon, W. (Buckingham)
Gow, Ian


Berry, Hon Anthony
Grant, Anthony (Harrow C)


Best, Keith
Greenway, Harry


Bevan, David Gilroy
Grieve, Percy


Biggs-Davison, Sir John
Griffiths, E.(B'y St. Edm'ds)


Blackburn, John
Griffiths, Peter Portsm'th N)


Blaker, Peter
Grist, Ian


Body, Richard
Grylls, Michael


Bonsor, Sir Nicholas
Gummer, John Selwyn


Bottomley, Peter (W'wich W)
Hamilton, Hon A.


Bowden, Andrew
Hampson, Dr Keith


Boyson, Dr Rhodes
Hannam, John


Braine, Sir Bernard
Haselhurst, Alan


Bright, Graham
Havers, Rt Hon Sir Michael


Brinton, Tim
Hawkins, Sir Paul


Brittan, Rt. Hon. Leon
Hayhoe, Barney


Brooke, Hon Peter
Heddle, John


Brotherton, Michael
Henderson, Barry


Brown, Michael(Brigg &amp; Sc'n)
Hicks, Robert


Browne, John (Winchester)
Higgins, Rt Hon Terence L.


Bruce-Gardyne, John
Holland, Philip (Carlton)


Bryan, Sir Paul
Hooson, Tom


Buchanan-Smith, Rt. Hon. A.
Hordern, Peter


Buck, Antony
Howell, Rt Hon D. (G'ldf'd)


Budgen, Nick
Howell, Ralph (N Norfolk)


Bulmer, Esmond
Howells, Geraint


Burden, Sir Frederick
Hunt, David (Wirral)


Carlisle, John (Luton West)
Hunt, John (Ravensbourne)


Carlisle, Kenneth (Lincoln)
Irving, Charles (Cheltenham)


Carlisle, Rt Hon M. (R'c'n)
Jenkin, Rt Hon Patrick


Chalker, Mrs. Lynda
Jessel, Toby


Channon, Rt. Hon. Paul
Johnson Smith, Sir Geoffrey


Chapman, Sydney
Jopling, Rt Hon Michael


Clark, Hon A. (Plym'th, S'n)
Joseph, Rt Hon Sir Keith


Clark, Sir W. (Croydon S)
Kellett-Bowman, Mrs Elaine


Clarke, Kenneth (Rushcliffe)
King, Rt Hon Tom


Clegg, Sir Walter
Kitson, Sir Timothy


Colvin, Michael
Knight, Mrs Jill


Cormack, Patrick
Knox, David


Costain, Sir Albert
Lamont, Norman


Cranborne, Viscount
Lang, Ian


Critchley, Julian
Latham, Michael


Crouch, David
Lawrence, Ivan


Dickens, Geoffrey
Lawson, Rt Hon Nigel


Dorrell, Stephen
Lee, John


Douglas-Hamilton, Lord J.
Lennox-Boyd, Hon Mark


Dover, Denshore
Lewis, Kenneth (Rutland)


du Cann, Rt Hon Edward
Lloyd, Ian (Havant &amp; W'loo)


Dunn, Robert (Dartford)
Lloyd, Peter (Fareham)


Durant, Tony
Loveridge, John


Dykes, Hugh
Luce, Richard


Eden, Rt Hon Sir John
Lyell, Nicholas


Eggar, Tim
McCrindle, Robert


Elliott, Sir William
Macfarlane, Neil


Eyre, Reginald
MacKay, John (Argyll)


Fairbairn, Nicholas
Macmillan, Rt Hon M.


Faith, Mrs Sheila
McNair-Wilson, M. (N'bury)


Farr, John
McNair-Wilson, P. (New F'st)


Fell, Sir Anthony
McQuarrie, Albert


Finsberg, Geoffrey
Madel, David


Fisher, Sir Nigel
Major, John


Fletcher-Cooke, Sir Charles
Marland, Paul


Fookes, Miss Janet
Marlow, Antony


Forman, Nigel
Marshall, Michael (Arundel)





Mates, Michael
Shepherd, Richard


Mather, Carol
Silvester, Fred


Mawby, Ray
Sims, Roger


Mawhinney, Dr Brian
Skeet, T. H. H.


Mayhew, Patrick
Smith, Cyril (Rochdale)


Mellor, David
Smith, Dudley


Meyer, Sir Anthony
Smith, Tim (Beaconsfield)


Miller, Hal (B'grove)
Speller, Tony


Mills, Iain (Meriden)
Spence, John


Mills, Sir Peter (West Devon)
Spicer, Michael (S Worcs)


Miscampbell, Norman
Squire, Robin


Mitchell, David (Basingstoke)
Stainton, Keith


Moate, Roger
Stanbrook, Ivor


Monro, Sir Hector
Stanley, John


Montgomery, Fergus
Steen, Anthony


Moore, John
Stewart, Ian (Hitchin)


Morris, M. (N'hampton S)
Stokes, John


Morrison, Hon C. (Devizes)
Stradling Thomas, J.


Morrison, Hon P. (Chester)
Tapsell, Peter


Murphy, Christopher
Taylor, Teddy (S'end E)


Myles, David
Tebbit, Rt Hon Norman


Neale, Gerrard
Temple-Morris, Peter


Needham, Richard
Thomas, Rt Hon Peter


Nelson, Anthony
Thompson, Donald


Neubert, Michael
Thorne, Neil (Ilford South)


Newton, Tony
Thornton, Malcolm


Onslow, Cranley
Townend, John (Bridlington)


Page, John (Harrow, West)
Townsend, Cyril D, (B'heath)


Page, Richard (SW Herts)
Trippier, David


Parkinson, Rt Hon Cecil
van Straubenzee, Sir W.


Parris, Matthew
Vaughan, Dr Gerard


Patten, Christopher (Bath)
Viggers, Peter


Pawsey, James
Waddington, David


Penhaligon, David
Wakeham, John


Percival, Sir Ian
Waldegrave, Hon William


Pink, R. Bonner
Walker, B. (Perth )


Pollock, Alexander
Walker-Smith, Rt Hon Sir D.


Prentice, Rt Hon Reg
Waller, Gary


Price, Sir David (Eastleigh)
Walters, Dennis


Proctor, K. Harvey
Ward, John


Raison, Rt Hon Timothy
Warren, Kenneth


Rathbone, Tim
Watson, John


Rees, Peter (Dover and Deal)
Wells, Bowen


Rees-Davies, W. R.
Wells, John (Maidstone)


Rhodes James, Robert
Wheeler, John


Ridley, Hon Nicholas
Whitney, Raymond


Ridsdale, Sir Julian
Wiggin, Jerry


Rifkind, Malcolm
Wilkinson, John


Roberts, M. (Cardiff NW)
Williams, D.(Montgomery)


Roberts, Wyn (Conway)
Winterton, Nicholas


Rossi, Hugh
Wolfson, Mark


Rost, Peter
Young, Sir George (Actor)


Royle, Sir Anthony
Younger, Rt Hon George


Sainsbury, Hon Timothy



Shaw, Giles (Pudsey)
Tellers for the Noes:


Shaw, Sir Michael (Scarb)
Mr. Robert Boscawen and


Shelton, William (Streatham)
Mr. John Cope.


Shepherd, Colin (Hereford)

Question accordingly negatived.

PROCEDURE (FINANCE)

Ordered,
That the Standing Order of 22nd January 1982 relating to the nomination of the Select Committee on Procedure (Finance) be amended, by leaving out Mr. Kevin McNamara.—[Mr. Stradling Thomas.]

SOUND BROADCASTING

Ordered,
That the Standing Order of 18th July 1979 relating to the nomination of the Select Committee on Sound Broadcasting be amended, by adding Mr. Michael English.—[Mr. Stradling-Thomas.]

Orders of the Day — Post Office Closures

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]

Mr. Frank Haynes: I should like to draw the Minister of State's attention to our proceedings on 19 February 1980 when we had a considerable debate on Post Office closures. My right hon. Friend the Member for Salford, West (Mr. Orme) opened the debate for the Opposition. He drew the attention of the Secretary of State for Social Services to the closures that would be caused by the Government's proposals. The Minister will probably remember the demonstration and lobby at the House by sub-postmasters. It seems that now the chickens have come home to roost. The Post Office closures have taken their toll.
There are 635 constituencies in this country. If a sub-post office closed in each one, there would be 635 closures. There has been a similar amount of closures since the Conservative Government took office. However, there has not been an average of one closure in each constituency. There have been four closures in the rural areas in my constituency. There has been nothing but suffering following the decision of the postmaster in Nottingham.
The rural post office service is under threat because of the events of the past few years. The number of rural post offices continues to fall. No doubt the Minister has been provided with the number of sub-post offices three years ago and the present number. The figures reveal declining rural post office services.
On 19 February 1980 the then Secretary of State for Social Services said:
The Government came into office committed to examine the cost and efficiency of the public sector and, wherever possible, to make savings in administration."—[Official Report, 19 February 1980; Vol. 979, c. 273.]
It seems that that is exactly what is happening. Those in rural areas, especially the elderly and young mothers, are being denied the right to a service that has been theirs for many years. This is happening across the nation but my constituency has been hit especially hard.
I agree with many of the comments that have been made, even by the Government, to the effect that the provision of a sub-post office involves someone taking on the job of running it and at the same time selling various commodities. The result is that various licences are issued. The Department of Health and Social Security uses sub-post offices in the rural areas quite heavily for Girocheques for pensions, children's allowance, unemployment benefit and for payments to those who are sick or away from work due to an accident.
There are many in rural areas who regard the sub-post office as a bank. However, the service that is provided by it is being denied to so many. The Ashfield district council has its rental payments paid at post offices. Tenants take their books to post offices.
Most local authorities carry rent arrears. The loss of a local post office encourages some tenants not to pay their rent and to go into arrears. That happens if the service that has been provided for many years is withdrawn.
The most recent closure took place because the post office service was provided in a co-operative shop. The

shop provided also the services of the Nationwide building society and a bank. When the co-operative society decided to close the shop, the post office went too.
The area concerned is one of the largest parishes in the country, with more than 11,000 people. The centre of the village, where the post office was, lies in a basin. The loss of the post office means that people now have to go to the outer perimeter of the village for post office services. In the central part of the village there are a number of complexes where elderly people live, and many mothers with young children. Moreover, because the village is in the middle of a mining area many of the elderly people who have retired after a lifetime's service in the pits suffer from chest complaints. Yet they are now expected to climb a hill in one direction or the other to the post office yonder.
The people of that area demonstrated their views powerfully, although in an orderly fashion, when they sent the postmaster a petition begging him to provide a local service. A local newsagent then expressed a willingness to take the job on. As the newsagent's shop had been built as a post office in the first place, there would have been no problem about security.
I know that there are supposed to be guidelines on these things, but I am at a loss to understand what is going on. In view of what the Secretary of State for Social Services said about saving money in the public sector I can only conclude that pressure is being applied over and above the guidelines and that is why there is to be no post office in that central area. The local authority has decided to develop the area by providing more shops. We already have a supermarket and there is to be a health centre across the road. The lady running one of the shops is quite prepared to take the post office job on.
I quote from a briefing given by the National Council For Voluntary Organisations:
One interesting point about rural post offices is that in many villages where the proportion of pensioners and other recipients of State benefits is high, correspondingly the proportion of DHSS agency business in that local post office may be much higher than the national figure of about 35 per cent. and it can reach 80 per cent. or 90 per cent.
That is almost the case in the area to which I refer. Yet the postmaster is adamant that a post office will not be provided.
I therefore applied for this Adjournment debate in the hope that the Minister will take note of what has happened and influence the Post Office to provide those people with the services to which they are entitled. I cite the wonderful example of an old lady of 86 who did not draw her pension for six weeks after the sub-post office was closed. In the end, someone had to take her. There are other problems. It is fair enough to suggest that someone should fetch the pensioners and others who cannot climb the hill and help them as much as possible. At the same time, they are entitled to a certain amount of privacy. Not every old-age pensioner wants everyone to know his business.
The newsagent who offered to take on the sub-post office recently said that she would operate it for nothing. Surely that is an incentive for the postmaster to provide the so desperately needed service. The guidelines refer to distances between post offices, the terrain and profitability. Those guidelines fit the problem in the village of Selston. Yet the postmaster has seen fit to turn down the application.
I hope that the Minister has listened carefully. I hope that he will use his influence to secure the provision of a sub-post office in Selston.

The Minister for Industry and Information Technology (Mr. Kenneth Baker): I wish to convey to the House the apologies of the Under-Secretary of State who deals with such matters and who should have replied to the debate tonight. His wife went into labour earlier today, and he is at her bedside. I am pleased to reply to the debate. The hon. Gentleman has fulfilled a pledge that he gave in his local newspaper to bring the matter to Parliament.
The Government are conscious of the importance of sub-post offices in rural areas. They are not only providers of important business services but are community meeting places that meet a social need. In many small communities they provide the necessary cement for the community.
In the hon. Gentleman's opening remarks he implied that there was a Government policy to reduce the numbers of sub-post offices. I do not want to make a political point, but I have the figures for closures during the past few years. During the lifetime of the Labour Government, the closures averaged about 200 a year. In the financial year ending March 1974, 234 closed; in 1975, 216; in 1976, 256; in 1977, 261; in 1978, 201 and in 1979, 129. The rate of closure fell a little in 1980 to 157, and in 1981 to 162. In the year ending March 1982 it fell to 62. Since March this year only six have closed. The matter has nothing to do with politics. I assure the hon. Gentleman that in no way have I or any of my predecessors influenced the Post Office on sub-post office policy.
I fully understand the concern expressed by the hon. Gentleman. The future of sub-post offices, especially in rural communities, is of concern to the Government. Ministers have frequently referred to the value that they attach to sub-post offices as a central part of rural community life. The matter was debated 18 months and two years ago. That is why my right hon. Friend the then Secretary of State for Social Services—he is now the Secretary of State for Industry—in his statement to the House on 12 May 1981 pledged to ensure the maintenance of an adequate sub-post office network. I welcome the opportunity to reiterate that commitment.
The hon. Gentleman may find it helpful if I set out the statutory position. In common with other nationalised industries, the Post Office is responsible for managing its day-to-day affairs under the powers that were vested in it when it was established as a public corporation by the Post Office Act 1969. The legislation also imposed a duty on the Post Office, in exercising those powers, to have regard to efficiency and economy and also to the social, industrial and commercial needs of the community. I remember those words being repeated as I took the British Telecommunications Bill through the House in 1981.
The nature and scale of counter services in a locality are, therefore, operational matters for the Post Office. A decision whether to close a post or sub-post office is one for the corporation. I therefore completely refute the hon. Gentleman's allegation that the Government are putting pressure on the Post Office to close sub-post offices. That is untrue. No Government has done that. The previous Labour Government did not do that. Governments do not have the power to do so.
Successive Governments have taken the view that it would not be right, even if they had the necessary powers,

to intervene in the detailed provision of sub-post offices. I repeat, however, that the Government are committed to the maintenance of an adequate sub-post office network.
I shall now deal with Post Office policy on the provision and closure of sub-post offices. The hon. Gentleman expressed disquiet about the criteria. I understand that it is based on the need to maintain a balance between the reasonable needs of the local community and the cost of meeting those needs. In practical terms, that translates into a broad criterion that a post office is not normally opened or replaced within one mile of an existing office in a town or within two miles of an existing office in a rural area. Those standards are not applied rigidly, and many other factors are taken into account. Such factors include the volume of business that is transacted at the office concerned, the nature and terrain of the area that it serves and the availability of bus services.
In view of the hon. Gentleman's comments about the aged and the infirm, I emphasise that the Post Office specifically consider the needs of that group. The procedure for the closure of an office takes careful account of all those factors and provides for consultation with local representatives to ensure that local interests are taken fully into account.
Although those criteria have applied for a considerable time, the opportunity to consider whether a sub-post office is replaced usually occurs on the resignation or retirement of the sub-postmaster or sub-postmistress or, in this case, the closure of the local co-operative society shop. As those positions might have been held for a long time, during which population movements could have taken place, the circumstances in which the original sub-post office was justified may change significantly. In each case, the post office must balance the need to serve the community and the need to provide a service at a reasonable price.
I accept that in some cases the decision may seem harsh. Nevertheless, I know that the Post Office takes a great deal of care when making decisions about closing sub-post offices. The examinations are carried out most thoroughly. It should not be forgotten, however, that in some cases an office has to be closed because no suitable applicant for the sub-postmastership can be found.
I have asked the Post Office to provide me with details of the case that has been raised by the hon. Gentleman. The village of Selston had three sub-post offices until the closure of the central sub-post office at the end of August 1982 as a result of the closure of the shop that housed it. As the two remaining sub-post offices at each end of the village are some 1·3 miles apart—well within the normal two-mile criterion for rural sub-post offices—the head postmaster did not think that a replacement sub-post office would be justified, particularly taking into account the fact that one of the remaining sub-postmasters has offered to deliver pensions at no extra cost and there is the existence, I understand, of an hourly bus service. One applicant, who, as the hon. Gentleman said, has received considerable publicity, through her offer to provide a service free, has been turned down on the grounds that her premises are less than half a mile from the existing sub-post office. The Post Office has commented that it would still have to meet the initial costs of setting up a service, including security and future administrative costs. There is only a limited amount of business available. A new sub-post office would take business away from the existing two sub-post offices.
The hon. Gentleman asked if I would exercise powers to try to ensure that the sub-post office was reinstated. I do not have those powers. I would not seek to exert pressure on the Post Office. I have looked into the case in some detail. I am satisfied that the Post Office has operated its procedures. I am sorry that it has given inconvenience to some of the hon. Gentleman's constituents. I feel, however, that the procedures have been followed properly and reasonably. I would not wish to bring any influence

to bear to try to ensure that they are reversed. I am following the precedent that all Ministers who have been responsible for these matters in the past have followed. It is surely right that a body like the Post Office, which is very responsible and aware of its social responsibilities, should be allowed in these matters to conduct its affairs in its own way.

Question put and agreed to.

Adjourned accordingly at six minutes past Twelve o'clock.